UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


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THE  LAW 


Private  Companies 


BELATING    TO 


BTJSIlSrESS     CORPOK  ATION  S 


ORGANIZED  UMDER  THE 


GENERAL    CORPORATION    LAWS 


STATE  OF  DELAWARE 


NOTES,    ANNOTATIONS    AND    CORPORATION    FORMS 


j^^^^  BY 

J.  ERNEST  SMITH 

Counselor-at-Law 


PHILADELPHIA 

T.  &  J.  W.  JOHNSON  &  CO. 

1899 


T 


Copyright,  1899, 

FY 

J.    ERNEST   SMITH. 


PREFACE. 


The  author  has  reason  to  beHeve  that  a  practical  annota- 
tion of  the  general  corporation  law  of  the  state  of  Delaware 
would  be  of  service  not  only  to  the  bar,  but  also  to  business 
men,  who  are  considering  or  resorting  to  the  formation  of 
corporations,  as  the  best  mode  of  carrying  into  effect  every- 
day business  requirements. 

The  present  general  corporation  law  herein  considered,  is 
Delaware's  second  general  law  of  this  nature,  and  was  passed 
in  conformity  with  the  requirements  of  the  constitution  (ar- 
ticle IX,  section  i),  viz. :  That  no  corporation  shall  be  created 
by  special  act,  but  only  by  general  law. 

The  first  law,  that  of  1883,  ^vhile  liberal  in  its  provisions, 
applied  to  a  limited  class  of  business  concerns,  and  prior  to 
this  law,  all  charters  for  incorporated  companies  were  granted 
by  special  act  of  the  legislature. 

In  this  edition  those  sections  of  the  law  (Nos.  67  to  126 
inclusive)  relating  to  public  or  quasi-public  corporations,  are 
not  treated  of,  it  being  the  intention  to  confine  the  limits  of 
this  work  to  such  corporations  as  may  be  termed  "Private 
Companies." 

As  the  Delaware  corporation  law  in  many  of  its  provisions 
closely  resembles  the  corporation  act  of  New  Jersey,  and  as 
there  have  been  many  decisions  of  the  courts  of  that  state 
determining  the  scope  and  powers  of  said  act,  citations  of 
such  cases  have  largely  been  made  in  this  volume. 

The  object  of  the  work  is  to  give  in  concise  form  such  gen- 
eral information  in  regard  to  the  formation  of  private  com- 

iii 


IV  PREFACE. 

panics,  their  powers,  management  and  taxation,  and  also  the 
liabihties  of  directors,  officers  and  stockholders,  as  may  not 
only  assist  the  lawyer  in  connection  with  the  class  of  corpo- 
rations of  which  it  treats,  but  may  also  point  out  some  of  the 
advantages  of  this  admirable  law  to  traders  and  business  men. 

The  author  is  under  many  obligations  to  James  B.  Dill, 
Esq.,  and  by  his  permission  has  made  citations  from  his  valu- 
able work  on  Private  Companies. 

Mr.  Charles  Warner  Smith,  of  the  Delaware  Bar,  has  as- 
sisted the  author  in  the  analysis  and  compilation  of  author- 
ities. 

J.  Ernest  Smith. 

900  Market  St.,  Wilmington,  Del. 
September.  1899. 


CONTENTS. 


PAGE 

Table  of  Delaware   Reports, x 

Table    of   cases    cited, xi 

Schedule   of   State   fees  and  taxes, xix 

Provisions  of  the  Constitution  respecting  Corporations,     ....  i 

An  Act  to  Provide  a  General  Corporation  Law, 3 

An  Act  to  Raise  Revenue  for  the  State  by  Taxing  Certain  Corpora- 
tions,       134 

Foreign  corporations  doing  business  in  this  State, 150 

Forms  and  precedents, 151 

Provisions  of  United  States  stamp  tax, 225 

General    Index, 231 

AN  ACT  TO  PROVIDE  A  GENERAL  CORPORATION  LAW. 

SECTION 

1.  Purposes  for  which  corporations  may  be  formed,  and  number 

necessary,  to  incorporate, 3 

2.  General  powers;  to  have  succession;  to  sue,  etc.;  to  have  com- 

mon seal;  to  hold  real  estate;  to  appoint  agents;  to  make  by- 
laws; to  wind  up  and  dissolve  itself, 4 

3.  Additional    powers, 10 

4.  Banking  powers  denied, 13 

5.  Act  may  be  amended  or  repealed,  but  remedy  against  officer  or 

corporation  not  to  be  impaired, 14 

6.  Powers  of  transacting  business  out  of  this  state, 15 

7.  Certificate  of  incorporation  and  what  it  must  contain,     ...  16 

8.  Certificate  may  create  and  define  additional  powers,     ....  21 

9.  Authentication  and  record  of  certificate, 24 

10.  Amendments  and  alterations, 25 

11.  Direction  of  affairs  by  incorporators 25 

12.  When  corporate  existence  begins, 26 

13.  When   capital  stock  to  be  paid;   sale  of  stock  upon  failure   to 

pay    instalments • 27 

14.  Liability  of  stockholders, 29 

15.  Lien  of  corporation  on  its  capital  stock .  29 

16.  Stock  deemed  personal  property;  how  transferable  and  payable: 

remedy  for  failure  to  pay  instalment, 31 

17.  When   stock  can   be   voted;    list   of  stockholders:    original    and 

duplicate  stock  and  transfer  books  to  be  evidence,     •■      ■      ■  33 

V 


Vi  CONTENTS. 

SECTION  FAC.B 

i8.  No  dividends  except  from  surplus;  liability  of  directors,     ■     ■      ■  37 

19.  Penalty  for  false  statement  by  directors 38 

20.  Number  of  directors  and  how  elected, 39 

21.  Officers  and  their  duties, 43 

22.  Agents  and  factors;  failure  to  elect  officers  not  to  work  dissolu- 

tion; vacancies,  how  filled, 45 

23.  Trustee,   etc.,  may   vote  stock, 46 

24.  Corporation  holding  its  own  stock  may  not  vote  it 46 

2^.  First   meeting   of   corporation, 46 

26.  By-laws:    by    whom    made, 47 

27.  Increase  of  authorized  capital  stock 48 

28.  Increase  of  capital  stock  by  amendment  to  certificate,  ....  49 

29.  .Assessment  upon  stock 49 

30.  Collection  of  assessment 51 

31.  Certificate  of  payment  of  stock 52 

32.  Penalty  for  dereliction  of  officers 53 

S3.  Reduction   of  capital  stock 53 

34.  Dissolution, 54 

35.  Powers  of  trustees  upon  dissolution 56 

36.  Continuance  of  corporation  after  dissolution .  56 

37.  .Appointment  of  trustees  and  receivers  by  chancellor 56 

38.  Jurisdiction    of    chancellor 58 

39.  Duties  of  trustees  or  receivers, 58 

40.  Surrender  of  franchise  before  beginning  business 58 

41.  Dissolution  not  to  abate  action  against  corporation 59 

42.  Filing  of  decree  or  judgment  of  dissolution 59 

43.  Service  of  legal  process  upon  corporation 60 

44.  .Action  to  enforce  liabilitj'  of  officers  and  stockholders.     ...  61 

45.  Remedy  against  corporation  for  debts  paid 61 

46.  Liabilities  of  directors  and  stockholders  secondary,     ....  62 

47.  Receivers  or  trustees   must  file  inventory 62 

48.  Proof  of  claims  against  corporations 63 

49.  -Adjustment  of  claims 63 

50.  Receiver  to  be  made  a  party  to  suits 65 

51.  Sale  of  perishable  or  deteriorating  property 65 

52.  Lien  of  employes  for  wages 66 

53.  Compensation   of  receivers 67 

54.  Consolidation  of  corporations 67 

55.  Nature  of  consolidated  corporations 68 

56.  Payment  for  stock  of  dissatisfied  stockholders 69 

57.  -Action  against  consolidating  corporations 70 

58.  Liability  of  corporations  not  to  be  impaired 70 

59.  -Authority  of  consolidated  corporations  to  issue  bonds  and  stock.  70 

60.  Sale  of  franchises;  purchasers  may  incorporate 71 

61.  Provisions  relating  to  sale  of  franchises 72 

62.  Forfeiture  of  charter  for  failure  to  commence    business.     .      .      .  72 


CONTENTS.  Vll 

SECTION  P*GK 

63.  Want  of  legal  organization  no  defence  in  action, 73 

64.  Name  to  be  displayed  on  principal  office, 74 

65.  Issuing  new  certificates  of  stock  for  those  lost  or  destroyed,     .  74 

66.  Proceedings  on  loss  or  destruction  of  certificate, 75 

67.  Drainage  and  reclamation  of  low  lands, 76 

68.  Building  and  loan  associations, 81 

69.  Railroads:  formation, 81 

70.  Approval  of  judge,  filing  additional  powers, 82 

71.  Required    capital    stock, 83 

T2.  Copy  of  charter,  evidence,  etc., 84 

T2)-  Subscribing  stock:  ten  per  cent,  of  subscription  must  be  paid.     .  84 

74.  Directors, 85 

75.  Organization, 85 

76.  Increase    of    capital    stock, 85 

T7.  Stock  deemed  personal  property:  how  transferable,     ....  86 

78.  Assessment  of  damages,  condemnation  proceedings,     ....  86 

79.  Width,   surveys,    etc., 88 

80.  Bridges,    passages,    etc., 90 

81.  Crossings,  switches,  signals,  etc., 92 

82.  Limitation  for  commencement  and  completion, 93 

83.  Powers  to  borrow  money,  etc., 93 

84.  Fences,  cattle,  guards,  etc., 94 

85.  Badge  of  conductor,  etc., 95 

86.  Damaging    property    of    road, 95 

87.  Annual  report  of  stockholders, 96 

88.  Merger 97 

89.  Signal  boards, ij 

go.  Gates,    flagmen,    etc., 98 

91.  Lighting   of   cars, 98 

92.  Air   brakes, 98 

93.  Penalty   for   dereliction, 98 

94.  Discrimination    in    charges, 99 

95.  Fees  to  the  state, 100 

96.  Steam,  heat  and  power, 100 

97.  Laying  pipes, loi 

98.  Electricity,  heat  and  power, 102 

99.  Laying  pipes  or  conduits, 102 

100.  Laying  wires, 103 

loi.  Gas  and  water, 103 

102.  Telegraph  and  telephone, Ij5 

103.  Railways:  formation,  etc., 106 

104.  Approval  of  judge,  filing  articles, 107 

105.  Stock  required  to  be  paid, 108 

106.  Stock  subscriptions:  ten  per  cent,  of  subscriptions  must  be  paid,  109 

107.  Directors, 109 

108.  Organization,        no 


viii  CONTENTS. 


SBCTION  PACK 

109.  Increasing  capital  stock, no 

no.  Stock  deemed  personal  estate;  how  transferable, no 

111.  Assessment    of   damages, .     .     .110 

112.  Width,    surveys,   etc., iii 

J13.  Bridges  and  passages, 113 

114.  Crossings,  etc 115 

115.  Limitation    for   commencement   and   completion, 116 

116.  Borrowing  money,  issuing  bonds, 117 

117.  Application  of  provisions  of  section  84, 117 

118.  Penalty  for  injury  to  property  of  road, 117 

119.  Signal   boards, 118 

120.  Annual  report  to  stockholders, 118 

121.  Merger, 119 

122.  Fees  to  the  state 120 

123.  Prohibition  from  use  of  streets  where  other  track  is  laid,  .      .      .  120 

124.  Lines  of  telegraph  or  telephone  for  use  of  road, 120 

125.  Certain  words  defined, 120 

126.  Copies,  etc.,  evidence, 121 

127.  State  fees  on  filing  certificates, 121 

128.  Situs  of  capital  stock, 122 

129.  Renewal  and  extension  of  corporate  existence, 123 

130.  Filing  certificate  of  renewal  and  recording  copy 124 

131.  State  tax  on  renewal, 124 

132.  Effects  of  renewal, 125 

133.  Power  of  corporation  to  hold  stock  in  other  corporations,     .      .  125 

134.  Amendment  of  certificate  before  payment  of  capital  stock,     .      .  126 

135.  Amendment   of   certificate   after   organization, 126 

136.  Meetings  of  stockholders;  principal  office  must  be  maintained  in 

Delaware, 128 

137.  Kinds  of  stock;  directors'  valuation  of  property  conclusive,     .     .  129 

138.  Amendments  to  charters  of  pre-existing  corporations,    ....  133 

139.  Inconsistent  laws   repealed 134 


AN      ACT      TO      RAISE      REVENUE      FOR      THE      STATE      BY      TAXING      CERTAIN 

CORPORATIONS. 

SECTION  PAGB 

1.  Corporation  taxation, 134 

2.  Annual   report   of  corporations, 135 

3.  Penalty  for  false  statements,  or  neglect  to  make  statement.     .      .  136 

4.  Rate  of  tax, 136 

5.  Certificate  of  secretary  of  state  to  treasurer, 139 

6.  Tax   to  be   a   debt, 139 

7.  Remedies  for  collection  of  tax, 139 

8.  Foreign  fire  insurance  companies  exempt, 140 

0.  Retaliatory  taxation 140 


CONTENTS.  IX 


SECTION  PAGE 

10.  Charter  void  for  failure  to  pay  taxes, 141 

11.  Report  of  state  treasurer;  governor's  proclamation  voiding  char- 

ter,    141 

12.  Proclamation  to  be  filed  and  published, 141 

13.  Penalty  for  acting  under  void  charter, 141 

14.  Other  remedies  for  collection  of  taxes, 142 

15.  Proclamation  of  governor  correcting  mistake, 143 

16.  Restoration  of  charter, 143 

17.  Review  of  assessment, 144 

18.  Compensation  of  secretary  of  state, 145 

19.  Pre-existing  corporations  exempt  from  tax, :  145 


TABLE  OF  DELAWARE  REPORTS. 


Delaware  Reports  are  cited  by  the  names  of  the  Reporters,  except  the 
Chancery  Reports. 

LAW  REPORTS. 

Harrington  [Harr.] 5  volumes. 

Houston    [Hoiist.], 9  volumes. 

Marvel, 2  volumes. 

Pennewill    [Penn.], i    volume. 

CHANCERY  REPORTS. 

Delaware  Chancery  [Del.  Ch.], 6  volumes. 


TABLE  OF  CASES. 


PAGE 

Ackerman  v.   Halsey, 6 

Albany  R.  R.  Co.  v.  Brownell, 15 

Alexander  v.   Berney, 18 

Alexander  v.   Cauldwell, 46 

Alloway's  Creek  v.  String, 18 

American  Coal  Co.  v.  County  Comrs., 123 

American  Dock  Co.  v.  Trustees  of  Public  Schools, 8 

American  Pig  Iron,  etc.,  Co.  v.  Assessors, 145,  146 

Archer  v.  American  Water  Works  Co., 32 

Argus  Co.  V.  Manning, 32 

Austen  v.  Hudson  River  Telephone  Co., 148 

Austen  v.  Westchester  Telephone  Co.,  • 148 

Babbitt  v.  East  Jersey  Iron  Co., 47 

Baily  v.  P.  W.  &  B.  R.  R.  Co., 15 

Bancroft  v.  Wil.  Conf.  Academy, 7,  8,  43 

Bank  of  Wil.  &  Brand,  v.  Wollaston, 45 

Bank  v.  Wollaston, 43 

Bank  v.  Young, 14 

Baptist  Church  v.   Mulford, 7 

Barkalow  v.  Totten, 28,  58 

Barnes  v.  Trenton  Gas  Light  Co., 41 

Barnet  v.  Paterson, 40 

Barry  v.  Merchants'  Exchange  Co., 13 

Barton  v.  Port  Jackson,  etc.,  Co., 30 

Beeber  v.  Walton,  Whann  &  Co., 34 

Benedict  v.  Columbus  Construction  Co. 42,  55 

Berwind-White  Coal  Mining  Co.  v.   Ewart, 38 

Blake  v.  Domestic  Mfg.  Co., 12,  44.  65 

Bloom  V.  Nat.  United  Benefit  Sav.  &  Loan  Co 42 

Boardman  v.  Lake  Shore  &  Mich.  South.  Ry.  Co., 38 

Booth  V.  Wonderly 2>^ 

Boyer   v.    Fenn 52 

Boynton   v.    Hatch, 133 

Eraddock  v.  R.  R.  Co., 28 

Bradley  v.   Bander, 123 

Brewster  v.   Hatch t,^ 

Brisbane  v.  D.  L.  &  W.  R.  R.  Co., 38 

Briscoe  v.  Southern  Kansas  Ry.   Co 16 

xi 


xn  TABLE    OF    CASES. 


PAGB 


Broadway  Bank  v.  McElrath, 31.  3^ 

Brokaw  v.  Ry.  Co., 6 

Brooklyn  Heights  R.  R.  Co.  v.  City  of  Brooklyn, 13 

Buffalo  &  N.  Y.  City  R.  R.  Co.  v.  Dudley, 28,  29 

Butts  V.   Wood, 42 

Cadmus  v.  Farr, 40 

Camden  Safe,  etc.,  Co.  v.  Burlington  Carpet  Co., 69.  71 

Cameron  v.  N.  Y  &  Mt.  V.  Water  Co., 68 

Camp  V.  Taylor, 56 

Carr  v.  Le  Fevre, 133 

Carr  v.   Risher, 53 

Carraher  v.   Mulligan, 53 

Central  R.  R.  Co.  v.  Penn.  R.  R.  Co., 20 

Chesebrough  Mfg.  Co.  v.  Coleman, 148 

Chicago,  etc.,  Ry.  Co.  v.  Town  of  Marseilles, 30 

Christmas  v.  Biddle 123 

Coddington  v.  Exrs.  of  Havens, 4 

Coe  V.  Johnson, 45 

Colbert  v.   Sutton, 122 

Columbus  Bank  v.  Bruce, 30 

Commonwealth  v.  Atlantic  Refining  Co., 148 

V.  Cleveland,  Painesville  &  Ashtabula  R.  R.  Co., 146 

V.  Keystone  Bridge  Co., 147 

V.  Lackawanna  Iron  &  Coal  Co., 148 

V.  Northern  Elec.  Lt.  &  Power  Co., 147 

V.  Quaker  City  Dye  Works, 148 

Commercial  Bank  v.  Lockwood's  Admr., 20 

Cone   V.    Russell,      . 23 

Conine  v.  J.  &  B.  R.  R.  Co., 7 

Conroe  v.  Natl.  Protection  Ins.  Co., 128,  148 

Consolidated  Coal  Co.  v.  Keystone  Chemical  Co., 66 

Cooper  V.  Frederick, 30 

Coyle  V.   Mclntyre, 3 

Craig  Med.  Co.,  The,  v.  The  Merchants'  Bank  of  Rochester,     ...  40 

Crawford    v.    Longstreet, 6,  12 

Dayton  v.   Quigley, 9 

De  Camp  v.   Dobbins, 8 

Delaware  &  Atlantic  R.  R.  Co.  v.  Irick 31 

Delaware  City  S.  &  P.  S.  W.  Co.  v.  Reybold, 20 

Delaware  R.  R.  Co.  v.  Tharp, 51 

De  Long  v.  De  Long  Hook  &  Eye  Co., 18 

Demarest  v.  Flack, 36 

Den   V.    Hay, 18 

V.  Holmes, 18 

V.  Vreelandt, 7 

Deringer's  Admr.  v.  Deringer's  Admr., 7 


TABLE    OF    CASES.  Xlll 


PAGB 

Dock  V.  Elizabethtown  Steam  Mfg.  Co., 60 

Dorris  v.  French, 28 

Downing  v.    Potts, 28,  35.  51,  130 

Easton  &  Amboy  R.  R.  Co.  v.  Inhabitants  of  Greenwich,     ....  8 

Edgerton  v.  Electric  Improvement,  etc.,  Co., 131 

Edison  v.   Edison  United  Phonograph   Co., 43 

Edison  Phonograph  Co.  v.  Assessors, 146 

Edison  United  Phonograph  Co.  v.  Assessors, 146 

Einstein  v.  Rochester  Gas  &  Electric  Co., 125 

Electro-Pneumatic  Transit  Co.'s  Case, 146 

Elkins  V.  Camden  &  Atl.  R.  R.  Co., 41 

Ellerman  v.  Chicago  Junction,  etc.,  Co., 431 

Empire  State  Sav.  Bk.  v.  Beard, 42 

England's  Executors  v.   Beatty  Organ  Co., 66 

Erlanger  v.  New  Sombrero  Phosphate  Co., 131 

Evening  Journal  Assn.  v.  State  Board  of  Assessors,     ....       147,  148 

Ex  parte  Murphy 35 

Facts  Publishing  Co.  v.  Felton, 60 

Falk  V.  Whitman  Cigar  Co., 58 

Farmers'  &  Mechanics'  Bank  v.  Polk, 43 

Fifth  Ward  Savings  Bank  v.  First  Natl.  Bank, 12,  44 

First  Nat.  Bank  v.  Smith, 123 

V.  Wallis, 44 

First  Natl.  Bank  of  Hightstown  v.  Christopher, 41 

Fitzgerald  v.  Maxim  Powder  Mfg.  Co., 66 

Fogg  V.  Blair, 133 

Frazee  v.  Mofifit, 147 

Gardner  v.    Butler, 41 

General  Electric  Co.  v.  Wightman, 52 

Genessee  Valley  &  Wyoming  Ry.  Co.  v.  Retsof  Mining  Co.,     ...  68 

Getty  V.  Devlin, 33 

Gibbs  V.  Long  Island  Bank, 32 

Gillet  v.  Moody, 30 

Globe,  etc.,  Assn.,  Matter  of, 4 

Goodell  V.  Union  Assn., 18 

Grosse  Isle  Hotel  Co.  v.  L'Anson's  Exrs 28 

Guild,  Exr.,  v.  Parker, 41 

Hackensack  Water  Co.  i>.  De  Kay, 27 

Handy  v.  Draper, 62 

Hayes  v.  Commonwealth, 28,  130 

Hebbard  v.  Southwestern  Cattle  Co., 28,  51 

Hill  V.  Beach, 36 

Hoboken  Bldg.  Assn.  v.  Martin, 18 

Hofifman   v.   Van    Nostrand, 56 

Holmes  &  Griggs  Mfg.  Co.  v.  Holmes  W.  M.  Co., 68 

Hood  V.  McNaughton, 28,50.51,58 


xiv  TABLE    OF    CASES. 

FAGS 

Hopper  V.  Lovejoy, S8 

Hoyle  V.  Plattsburgh  &  Montreal  R.  R.  Co., 42 

Hubbard  v.  Natl.  Protection  Ins.  Co., 148 

Hunterdon  County  Bank  v.  Nassau  Bank, 31 

In  re  Election  of  Cape  May,  etc.,  Nav.  Co., 46 

In  re  Election  of  St.  Lawrence  Steamboat  Co., 35 

In  re  Lighthall   Mfg.   Co 35 

In  re  Long  Island  R.  R.  Co., 35 

Iowa  Lumber  Co.  v.  Foster, 30 

Jackson  v.  People's  Bank, 64 

Jefiferson  v.  Stewart, 34 

Jennison  v.  The  Citizens'  Savings  Bank, 46 

Jermain  v.  L.  S.  &  M.  S.  Ry.  Co., 38 

Jourdan  v.  L.   I.   R.  R.   Co., 44 

Kent  County  R.  R.  Co.  v.  Wilson, 50 

King  V.  Paterson  &  H.  R.  R.  R.  Co., 38 

Kirkpatrick   v.    Assessors, 145 

Knoop  V.  Bohmrich, 6 

Knox  V.  Eden  Musee  Co.,     .     .     .     ' 75 

Kruse   v.    Dusenbury, 36 

Kuser  v.  Wright, 42 

Lancaster  v.  Amsterdam  Improvement  Co 36 

Lanning  v.   Sisters  of  St.   Francis, 18 

Lattomus  v.  Farmers'  Mut.  F.  I.  Co., 9 

Leggett  V.  N.  J.  Mfg.  Co., 7 

Legrand  v.  Manhattan  Mer.  Assn., 13 

Lehigh  Coal  &  Nav.  Co.  t/.  C.  R.  R.  of  N.  J. 66 

Lehigh  Crane  Iron  Co.  v.  Com., 146 

Leo  V.  Green 64 

Libby  v.  Tobey, 131 

Liebke  v.  Knapp, 133 

Loewenthal  v.  Rubber  Reclaiming  Co., 9,  40 

Logan  V.   McAllister, 26 

Lucas  V.   Pitney, u 

McCaulley  v.  Jenney 7 

McCulloch  V.  Maryland, 12 

McBride  v.   Elmer, 18 

McDermott  v.  Evening  Journal  Assn., 6 

McKenney  v.  Diamond  State  Loan  Assn., 47 

McNeely  v.  Woodrufif 46 

Manhattan  Mfg.  Co.  v.  N.  J.  Stock  Yard  Co 7 

Mann  v.   Currie, 29 

Marshall   v.    Sherman, 61 

Martin  v.  N.  F.  P.  Co., 46 

Matthews  v.  Hoagland 31 

Mayor,  etc..  Baltimore  v.  Bait.,  etc.,  R.  R 123 


TABLE    OF    CASES.  XV 


PAGB 

Mechanics'  Bank  v.  N.  Y.  &  N.  H.  R.  R.  Co., 28,  130 

Mendham  v.  Losey, 7 

Meredith  et  al.  v.  N.  J.  Zinc  &  Iron  Co., 131,  133 

Metropolitan  Tel.  Co.  v.  Domestic  Tel.  Co., 40.  42 

Middletown  v.   McCormick, 18 

Miller  v.  Ratterman 130 

Mills  V.  Stewart, 28 

Mingin  v.  Alva  Glass  Mfg.  Co., 66 

Mitchell,  Vance  &  Co.  v.  Ferris  &  Co., 61 

Mitchell  V.  Rubber  Reclaiming  Co., Zl 

Montgomery  t/.  Forbes ' 36 

Morgan   v.    Skiddy ZZ 

Morris  Canal  Co.  v.  Love 12 

Mt.  Holly  Turnpike  Co.  v.  Ferree, 31 

Nassau  Bank  v.  Brown, 53 

Nassau  Phosphate  Co., 4 

National  Park  Bank  z;.  G.  A.  M.  W.  &  S., 13 

National  Trust  Co.  v.  Miller, 57,  58 

Neary  z'.  P.  W.  &  B.  R.  R., 4 

Newfoundland  R.  R.  Construction  Co.  v.  Schack, 57 

New  Jersey  Midland  Ry.  Co.  v.  Strait 28 

New  Orleans  v.  La  Blanc, 148 

Newport  Natl.   Bank  v.  Tweed, 46 

New  York,  Lake  Erie  &  Western  R.  R.  Co.  v.  Haring 6 

Northern  R.  R.  Co.  v.  Miller, 29 

North  River  Meadow  Co.  v.  Christ  Church, 34 

Norton  Construction  Co.  v.  Assessors, 146 

Norton  v.  Berlin  Iron  Bridge  Co., 60 

V.  Janvier, ZZ 

Odd  Fellows'  Hall  Co.  v.  Glazier, 5i 

Ogdensburg,  Rome  &  Clayton  R.  R.  Co.  v.  Frost, 29 

Ohio  State  Bank  7;.  "Fox, 3° 

Olmstead  v.   Morris  Aqueduct, 12 

Oregon  R.  R.  Co.  v.  Oregonian  R.  R.  Co., 12 

Osborne  v.  Tunis, 7 

Oswego  Starch  Factory  v.  Dolloway, 148 

Ottawa  Glass  Co.  v.    McCaleb, ^^Z 

Park  V.  Grant  Locomotive  Works, I3 

Parker  v.  Washoe  Mfg.  Co., 7 

Parmelee  v.  Associated  Physicians  &  Surgeons, 4° 

Patterson  v.  Robinson  et  al., 4° 

Penna.  R.  R.  Co.  v.  National  Railway  Co 8 

People  ex  rel.  Brush  El.  Mfg.  Co.  v.  Wemple, I47 

People  ex  rel.  Edison  El.  111.   Co.  v.  Wemple, I47 

People  ex  rel.  Edison  Electric  Light  Co.  v.  Barker,     .      .      .       147,  148 

People  ex  rel.  Roebling's  Sons  Co.  v.  Wemple, 148 


XVI  TABLE    OF    CASES. 


PACK 

People  ex  rel.  Schwarzschild  &  Sulzberger  Co.  v.  Roberts,     .           .  147 

People  ex  rel.  Singer  Mfg.  Co.  v.  Wemple, 146 

People  ex  rel.  Fred.  A.  Stokes  Co.  v.  Roberts, 147 

People  ex  rel.  Union  Pacific  Tea  Co.  v.  Roberts, 148 

People  V.   Ballard, 3 

7'.  Horn   Silver  Mining   Co., 147 

V.  Knickerbocker  Ice  Co., 147 

V.  N.  Y.  F.  Dock  Co., 147 

V.   O'Brien,         15 

V.  Roberts, 147 

Phila.,  Wilmington  &  Bait.  R.  R.  Co.  v.  Bowers, 15 

Powers  V.   Knapp, 52 

Prall  V.  Tilt, 31,32 

Pratt  V.  Munson 71 

Press  Printing  Co.  v.  State  Board  of  Assessors, 147,  148 

Printing  Co.  v.  Assessors, 147 

Rafferty,  Receiver,  v.  Bank  of  Jersey  City, 27 

Randel  v.  Ches.  &  Del.  Canal  Co., 45 

Randolph  v.  Larned, 65 

Raub  V.  Blairstown  Creamery  Assn., 7 

Rawnsley  v.  Trenton  Mut.  Life  Ins.  Co., 57 

Receiver  v.  Spielmann, 58 

Redmond  v.  Dickerson  et  al., 42 

Reed  v.  Wilmington  Steamboat  Co., 18 

Rice  V.   Foster, 15,  22,  48 

Richardson,  Trustee,  v.  Delaware  Loan  Asso., 6, 48 

Richardson  v.  Swift, z? 

Riche  V.  Ashbury  Co., 11 

Rogers  v.  N.  J.  Ins.  Co., 31 

V.  New  York  &  Texas  Land  Co., 29 

Rorke  v.  Thomas, 38 

Rossie  Iron  Works  v.  Westbrook, 128 

Runyan  v.  Lessee  of  Coster, 16 

Rural  Homestead  Co.  v.  Wildes, 131 

Rutter  V.  Kilpatrick, .  2,2 

SafTord  v.  Wycoff, 13 

Schmidt  v.  Nelke  Art  Lithographic  Co., 7i 

Sheridan  El.  Lt.  Co.  v.  Chatham  N.  Bk., 41 

Silk  Mfg.  Co.  V.  Campbell, 6 

Sinclair  v.   Dwight, 29 

Small  V.  Herkimer  Mfg.  Co., 28 

Smith  V.  Downey,         123 

Spader  v.  Mural  Decorating  Co., 66 

Sparks  v.  Farmers'  Bank, 44 

St.  Lawrence  S.  B.  Co.,  Matter  of, 46 

St.  Romes  v.  Levee  Cotton  Co., t,2 


TABLE    OF    CASES.  XVll 


PAGE 

State  ex  rel.  Bush  v.  Warren  F.  Co., 31 

State  ex  rel.  v.  Park  &  Nelson  Lumber  Co., 36 

State  V.   Brown, 8 

V.  Elizabeth, 8 

V.  Fitzpatrick, 74 

V.  Height, 8 

V.  Mansfield, 8 

V.  McGrath,        18 

V.  Overton, 9 

V.  Passaic, 6 

V.  Ry.  Co., 6 

V.  Rohlffs, 125 

V.  Smith, 30 

c'.  Wilmington  City  Council, 47 

V.  Wilmington  City,     ...  - 6 

State  of  Delaware  f.  President,  Directors,  and  Company  of  the  Bank 

of  Smyrna, 14 

State,  New  Jersey  R.  R.  &  Transportation  Co.  v.  Hancock,     ...  12 

Steamboat  Co.  v.  Whilldin, 4 

Steinway  v.  Steinway  &  Sons, 13 

Stewart  v.   Bright, 76 

V.  Lehigh  Valley  R.  R.  Co., 41 

Stockbridge  v.   Beckwith, 57 

Stockton  V.  American  Tobacco  Co., 27 

Stokes  V.  N.  J.  Pottery  Co., 44 

Stout  V.   Zulick, 26,  36,  73 

Stratton  v.  Allen, 41 

Stroud  V.  Consumers"  Water  Co., 41 

Tappan  v.   Merchants'   Nat.    Bank, 123 

Taylor  v.  Miami  Exporting  Co., 30 

Terry  v.  Rothschild, 62 

The  King  v.  Tregoning, I47 

Thomson-Houston  Elec.   Co.  v.  Murray, 39 

Thornton  v.  Wabash  Ry.  Co., 71 

Titus  V.  Cairo  &  Fulton  R.  R.  Co., 40 

Todd  V.   Diamond  State  Iron  Co., 48 

Trenton  Mut.  Life  Ins.  Co.  v.  Perrine, 6 

Trenton  Pass.  R.  R.  v.  Wilson 6g 

Troy  &  Boston  R.  R.  Co.  v.  Tibbitts, 28,  29 

Union  Bank  v.   State, 123 

Union  Steamboat  Co.  v.  Buffalo, 148 

U.   S.  Vinegar  Co.  v.   Schlegel, 74 

Vance  v.   Ry.    Co., 6 

Van  Cott  V.  Van  Brunt, I33 

Vandegrift  v.  Del.  R.  R.  Co., 45 

Vandenburgh  v.  Broadway  Ry.  Co., 35 


XVIU  TABLE    OF    CASES. 


PAGB 

Van  Vleet  v.  Jones 52 

Van  Hook  v.  Summerville  Mfg.   Co., 34 

Vanneman  v.  Young, 27 

\'an  Wagenen  v.  Baldwin, 18 

Vatable  v.  N.  Y.,  L.  E.  &  W.  R.  R.  Co., 71.  72 

Vaughn  v.  Hankinson's  Admr., 7 

Veeder  v.  Mudgett 52 

Vernon  et  al., 34 

Verplanck  v.  Mercantile  Ins.  Co., 30 

Wahlig  V.  S.  P.  M.  Co., 46 

Walker  v.  Anglo-Am.  M.  &  T.  Co 29.  33 

V.  Dixon  Crucible  Co., 32. 

Waples  V.   Waples, 8, 45 

Washburn  v.  Natl.  Wall  Paper  Co., 131 

Watson  V.  Acquackanonck  Water  Co., 11 

Weeks  v.  Silver  Islet  C.  M.  &  L.  Co 28 

Wells  V.  Rahway  White  Rubber  Co., 40 

Western  Transportation  Co.  v.  Scheu, 148 

Wetherbee  v.  Baker, 34.  6r,  132 

White  V.  Thomas  Inflatable  Tire  Co., 23 

Whitehead  v.  Hamilton  Rubber  Co. 7 

Whitney  v.  Ragsdale, 123 

Whittaker  v.  Amwell  Nat.  Bank 42 

Williams  v.   Boyce 38 

V.  W.  U.  T.  Co., • 38 

Wilmington  &  Phila.  Turnpike  Co.  v.  Bush y:^ 

Wilson  V.  King's  Co.  E.  R.  R.  Co., 46 

V.   Rockland   Manuf.    Co., 45 

Winslow  V.    Fletcher, 123 

Woolwich  V.   Forrest, 18 

Worrell  v.  First  Pres.   Church, 6 

Wright  V.  First  Natl.  Bank 42 

Zinc  Co.  V.   Franklinite  Co., 10 


SCHEDULE  OF  FEES  AND  TAXES. 

STATE    TAXES    AND    FEES    REQUIRED    TO    BE    PAID    TO    THE    SECRETARY    OF 

STATE    ON    FILING    ANY    CERTIFICATE    OR    OTHER    PAPER    RELATING 

TO   CORPORATIONS. 

Amended  certificate  of  incorporation  (other  than  those  authoriz- 
ing increase  of  capital  stock),  $20  00 

Certificate  of  change   of  principal   office,    5  00 

Certificate  of  change  of  name,    20  00 

Certificate  of  decrease  of  capital   stock,    20  00 

Certificate  of  increase  or  decrease  of  number  of  shares,    20  00 

Certificate  of  dissolution,  20  00 

Certificate  of  incorporation,  for  each  $1,000  of  the  total  stock  au- 
thorized (but  in  no  case  less  than  $20), 15 

Certificate  of  increase  of  capital  stock,  for  each  $1,000  of  such  in- 
crease,    15 

Certificate  of  consolidation  or  merger,  for  each  $1,000  of  capital 
stock  of  the  new  company,  over  and  above  the  total  capital  stock 

of  the  companies  so  consolidated  or  merged,   15 

(But  in  no  case  less  than)   20  00 

Other  certificates,   5  00 

For  receiving,  filing  and  indexing  any  papers  required  by  law  to 

be  filed,    200 

For  certified  copies,  per  line,  02 

For  official  seal  on  certificate,  i  00 

For  recording  where  required  by  law,  per  line,  01 

For  recording  original  or  amended  certificate  of  incorporation  to 

the  recorder  of  deeds,  according  to  length,  about  4  00 

EXEMPTIONS. 
Beligious,  charitable  and  educational  corporations  are  exempt. 


XIX 


ANNUAL  FRANCHISE  TAXES. 

PAYABLE  TO  THE  STATE  TREASURER. 

Telegraph,  Telephone,  Cable  and  Express  Companies,  on  gross 
amount  of  receipts  from  business  done  in  this  state,  annually  re- 
turned to.  or  ascertained  by,  the  secretary  of  state,  ifo 

Companies  for  the  distribution  of  Electricity,  Heat  or  Power, 
or  for  the  production  and  distribution  of  Steam,  Heat  or 
Power,  or  for  the  production,  distribution  or  sale  of  Gas,  on  the 
gross  amount  of  receipts  from  business  done  in  this  state,  annually 
returned  to,  or  ascertained  by,  the  secretary  of  state, 2-5  of  i  % 

And  upon  the  dividends  in  excess  of  4  per  centum  so  paid  or  de- 
clared by  any  such  corporation,   4% 

Oil  or  Pipe  Line  Companies,  on  the  gross  amount  of  its  receipts 
from  business  done  in  this  state,  annually  returned  to,  or  ascer- 
tained by,  the  secretary  of  state,   3-5  of  i  % 

Insurance  Companies  (other  than  life),  on  the  gross  amount  of 
premiums  received  by  it  upon  the  lives  of  persons  resident  or 
property  located  within  this  state,  annually  returned  to,  or  ascer- 
tained by.  the  secretary  of  state,   }i  oi  1% 

Life  Insurance  Companies,  on  surplus,  54  of  i  % 

And  on  total  gross  insurance  premiums  collected, 3-10  of  i  % 

Parlor,  Palace  or  Sleeping  Car  Companies,  on  the  gross  amount 
of  its  receipts  for  fare  or  tolls  for  transportation  of  passengers 
within  this  slate,  annually  returned  to,  or  ascertained  by,  the 
secretary  of  state,   i^A% 

All   other  Companies,   on   capital  stock  issued  and   outstanding 

up  to  and  including  $3,000,000,  1-20  of  I  % 

On  amount  of  capital  stock  issued  and  oustanding  in  excess  of 
$3,000,000  and  not  exceeding  $5,000,000,  1-40  of  i  % 

On    each   $1,000,000   of   capital   stock    issued   and    outstanding    in 

excess  of  $5.000,000 $30  00 

XX 


EXEMPTIONS    FROM    TAX.  XXI 

EXEMPTIONS  FROM  TAX. 

Bailroads,  railways,  canals,  banking  corporations,  savings  banks, 
cemeteries,  religious,  charitable  or  educational  companies,  and  manu- 
facturing or  mining  companies,  fifty  per  centum  of  whose  capital  stock 
issued  and  outstanding  is  invested  in  manufacturing  and  mining  in  this 
state.  Manufacturing  and  mining  companies  not  having  said  fifty  per 
cent,  so  invested  but  having  a  part  of  capital  stock  so  invested,  are  en- 
titled to  deduction  of  value  of  real  and  personal  property  used  in  manu- 
facturing and  mining  in  the  state,  from  amount  of  capital  stock  issued 
and  outstanding. 

Section  2  of  the  franchise  tax  law  provides  that  certain  corporations 
(above  noted)  shall  make  report  of  their  total  receipts  of  business  done  in 
this  state,  and  Section  4  requires  such  companies  to  pay  to  the  state 
treasurer  the  amount  of  franchise  tax  fixed  upon  such  report. 

Any  such  company  operated  wholly  outside  of  this  state,  is  therefore 
not  required  to  make  a  report,  and  would  not  be  subject  to  a  franchise  tax. 

Section  125  defines  the  word  "Eailroad"  to  be  a  road,  the  engines, 
cars,  carriages,  and  coaches  on  which  are  propelled  by  steam  power;  and 
the  word  "Bailway"  to  be  a  road  the  cars,  carriages,  and  coaches  on  which 
are  propelled  by  electricity,  by  cable,  motor  or  by  any  improved  motive 
power,  other  than  steam. 


CONSTITUTION 


OF   THE 


STATE  OF  DELAWARE. 

Adopted  in  Convention  June  4,  1897.     In  effect  June  10,  1897. 


PROVISIONS  RESPECTING  CORPORATIONS. 

ARTICLE  VIIL 

Section  4.  No  appropriation  of  the  public  money  shall  be 
made  to,  nor  the  bonds  of  this  state  be  issued  or  loaned  to 
any  county,  municipality  or  corporation,  nor  shall  the  credit 
of  the  state,  by  the  guarantee  or  the  endorsement  of  the 
bonds  or  other  undertakings  of  any  county,  municipality  or 
corporation,  be  pledged  otherwise  than  pursuant  to  an  act  of 
the  general  assembly,  passed  with  the  concurrence  of  three- 
fourths  of  all  the  members  elected  to  each  house. 

^  JjC  ^  >]?  JjC 

Section  8.  No  county,  city,  town  or  other  municipality 
shall  lend  its  credit  or  appropriate  money  to,  or  assume  the 
debt  of,  or  become  a  shareholder  or  joint  owner  in  or  with 
any  private  corporation  or  any  person  or  company  whatever. 

ARTICLE  IX. 

Section  i.  No  corporation  shall  hereafter  be  created, 
amended,  renewed  or  revived  by  special  act,  but  only  by  or 
under  general  law,  nor  shall  any  existing  corporate  charter  be 
amended,  renewed  or  revived  by  special  act,  but  only  by  or 

I 


2  CORPORATION    LAW    OF    DELAWARE. 

under  general  law;  but  the  foregoing  provisions  shall  not 
applv  to  municipal  corporations,  banks  or  corporations  for 
charitable,  penal,  reformatory,  or  educational  purposes,  sus- 
tained in  whole  or  in  part  by  the  state.  The  general  assem- 
bly shall,  by  general  law,  provide  for  the  revocation  or  for- 
feiture of  the  charters  of  all  corporations  for  the  abuse, 
misuse,  or  non-user  of  their  corporate  powers,  privileges  or 
franchises.  Any  proceeding  for  such  revocation  or  forfeiture 
shall  be  taken  by  the  attorney-general,  as  may  be  provided 
by  law.  No  general  incorporation  law,  nor  any  special  act 
of  incorporation,  shall  be  enacted  without  the  concurrence 
of  two-thirds  of  all  the  members  elected  to  each  house  of  the 
general  assembly. 

Section  2.  No  corporation  in  existence  at  the  adoption  of 
this  constitution  shall  have  its  charter  amended  or  renewed 
without  first  filing,  under  the  corporate  seal  of  said  corpora- 
tion, and  duly  attested,  in  the  ofifice  of  the  secretary  of  state, 
an  acceptance  of  the  provisions  of  this  constitution. 

Section  3.  No  corporation  shall  issue  stock,  except  for 
money  paid,  labor  done  or  personal  property,  or  real  estate 
or  leases  thereof  actually  acquired  by  such  corporation;  and 
neither  labor  nor  property  shall  be  received  in  payment  of 
stock  at  a  greater  price  than  the  actual  value  at  the  time  the 
said  labor  was  done  or  property  delivered,  or  title  acquired. 

Section  4.  The  rights,  privileges,  immunities  and  estates 
of  religious  societies  and  corporate  bodies,  except  as  herein 
otherwise  provided,  shall  remain  as  if  the  constitution  of  this 
state  had  not  been  altered. 

Section  5.  No  foreign  corporation  shall  do  any  business 
in  this  state  through  or  by  branch  offices,  agents  or  repre- 
sentatives located  in  this  state,  without  having  an  authorized 
agent  or  agents  in  the  state  upon  whom  legal  process  may 
be  served. 

Section  6.  In  all  elections  for  directors  or  managers  of 
stock  corporations  each  shareholder  shall  be  entitled  to  one 
vote  for  each  share  of  stock  he  mav  hold. 


AN  ACT 

TO 

PROVIDE 
A  GENERAL   CORPORATION   LAW 

FO»   THE  STATE   OF 

DELAWARE. 

Approved  March  io,  1899. 

purposes. 

Section  i.  Any  number  of  persons,  not  less  than  three, 
may  associate  to  estabhsh  a  corporation  for  the  transaction 
of  any  lawful  business,  or  to  promote  or  conduct  any  legiti- 
mate object  or  purpose  under  the  provisions  of  and  subject 
to  the  requirements  of  this  act  as  hereinafter  provided ;  ex- 
cepting for  such  purposes  as  are  excluded  from  the  operation 
of  a  general  law  by  section  i  of  article  ix,  of  the  constitution 
of  this  state,  upon  making  and  filing  a  certificate  of  incorpo- 
ration in  writing  in  manner  hereinafter  mentioned. 

A  corporation  is  an  artificial  being  and  possesses  such  powers  only  as 
are  conferred  upon  it  by  its  charter,  either  expressly  or  as  incidental  to  its 
existence:    Coyle  v.  Mclntyre,  7  Houst.  44. 

A  corporation  is  purely  artificial,  having  no  natural  or  inherent  power, 
but  only  such  as  its  charter  confers.  The  charter  of  a  corporation  formed 
under  general  laws  is  the  statute  under  which  it  was  organized.  Upon 
filing  the  certificate  of  incorporation  it  comes  into  existence  with  power 
to  do  only  that  which  is  expressly  or  impliedly  authorized  by  the  statute: 
People  V.  Ballard.  134  N.  Y.  269. 

3 


4  CORPORATION    LAW    OF    DELAWARE, 

Legislative  acts  are  to  be  read,  understood  and  interpreted  according 
to  the  plain  meaning  and  ordinary  import  of  the  language  employed  in 
them:    Neary  v.  P.  W.  &  B.  R.  R.,  7  Houst.  419. 

In  the  case  of  Steamboat  Co.  v.  Whilldin,  4  Harr.  228-230,  Chief  Justice 
Booth,  in  his  charge,  cautioned  the  jury  against  influences  from  extrane- 
ous remarks  about  "soulless  corporations"  or  "public  excitement."  Cor- 
porations are  collections  of  individuals  entitled  to  the  same  protection 
to  property  in  their  aggregate  or  corporate  capacity  as  they  would  have 
in  their  individual  capacity.  The  jury  have  nothing  to  do  with  "public 
excitment,"  it  is  to  have  no  influence  on  their  verdict.  Neither  ought  it 
to  have  any  influence  that  the  defendant  is  a  "stranger"  and  not  a  citizen 
of  this  state. 

The  statute  authorizes  persons  to  form  a  corporation;  it  is  implied 
that  they  shall  be  of  full  age:  Matter  of  Globe,  etc.,  Assn.,  135  N.  Y. 
280,  284,  and  cases  cited.  See  also  Lindley  on  Companies,  p.  39.  In 
England  it  has  been  held  that  the  incorporation  is  not  rendered  invalid 
by  the  fact  that  one  of  the  subscribers  was  an  infant:  Nassau  Phosphate 
Co.,  2  Ch.  D.  610. 

The  word  "persons"  in  general  corporation  acts  means  natural  persons 
and  not  corporations:    Coddington  v.  Exrs.  of  Havens,  8  N.  J.  Eq.  590. 

FUNDAMENTAL   POWEES. 

Section  2.  Every  corporation  created  under  the  pro- 
visions of  this  act  shall  have  power : 

Succession. 

1.  To  have  succession,  by  its  corporate  name,  for  the  time 
stated  in  its  certificate  of  incorporation,  and  when  no  period 
is  limited,  it  shall  be  perpetual. 

To  Sue  and  be  Sued. 

2.  To  sue  and  be  sued,  complain  and  defend  in  any  court  of 
law  or  equity. 

Common  Seal. 

3.  To  make  and  use  a  common  seal  and  alter  the  same  at 
pleasure. 

May  Acquire  Property. 

4.  To  hold,  purchase  and  convey  such  real  and  personal 
estate  as  the  purposes  of  the  corporation  shall  require,  not 
exceedini^  in  value  the  amount  limited  in  its  charter,  and  all 


CORPORATION    LAW    OF    DELAWARE.  5 

Other  real  estate  which  shall  have  been  bona  fide  mortgaged 
to  the  said  corporation  by  way  of  security,  or  conveyed  to  it 
in  satisfaction  of  debts  previously  contracted,  or  purchased  at 
sales  upon  judgments  or  decree  which  shall  have  been  ob- 
tained for  such  debts,  and  to  mortgage  any  such  real  or  per- 
sonal estate  with  its  franchises;  the  power  to  hold  real  and 
personal  estate,  except  in  the  case  of  religious  corporations, 
shall  include  the  power  to  take  the  same  by  devise  or  bequest. 

Agents. 

5.  To  appoint  such  of^cers  and  agents  as  the  business  of 
the  corporation  shall  require,  and  to  allow  them  suitable  com- 
pensation. 

By-Laws. 

6.  To  make  by-laws  not  inconsistent  with  the  constitution 
or  laws  of  the  United  States  or  of  this  state,  fixing  and  alter- 
ing the  number  of  its  directors  for  the  management  of  its 
property,  the  regulation  and  government  of  its  affairs,  and 
for  the  certification  and  transfer  of  its  stock,  with  penalties  for 
the  breach  thereof  not  exceeding  twenty  dollars. 

Dissolution. 

7.  To  wind  up  and  dissolve  itself,  or  to  be  wound  up  and 
dissolved  in  the  manner  hereinafter  mentioned. 


FUNDAMENTAL    POWERS. 
Succession. 

1.  The  corporation  act  of  1883  limited  the  period  of  cor- 
porate existence  to  twenty  years,  unless  renewed. 

Companies  formed  under  the  present  act  may  have  per- 
petual existence.     See  section  7,  post. 

To  Sue  and  be  Sued. 

2.  A  corporation  is  bound  by  the  acts  of  its  agent  within 
the  scope  of  his  authority. 

If  an  agent  of  a  corporation  acts  without  the  scope  of  his  authority  and 
-said    acts   be    in   any   way    recognized    by    the    corporation    as    valid,    it 


6  CORPORATION    LAW    OF    DELAWARE. 

amounts  to  a  ratification  and  the  corporation  is  liable  thereon:  Richard- 
son, Trustee,  v.  Delaware  Loan  Asso.,  9  Houst.  354.  It  is  not  necessary 
on  trial  to  prove  the  incorporation  and  existence  of  such  corporation,  in 
an  action  by  or  against  a  corporation,  unless  an  affidavit  shall  be  filed 
denying  the  existence  of  the  corporation  as  alleged:  Del.  Code.  p.  791. 
See  also  Section  63.  post. 

It  is  a  perfectly  well-settled  principle  both  in  this  country  and  in  Eng- 
land, that  civil  corporations,  whether  public  or  private,  are  subject  to  the 
general  law  of  the  land,  and  amenable  to  the  judicial  tribunals  for  the 
proper  exercise  of  their  powers:  State  v.  Wilmington  City  Council.  3 
Harr.  294-299. 

The  power  to  sue  and  be  sued  implies  also  the  power  to  compromise 
suits:   EUerman  v.  Chicago  June.  Ry.,  etc.,  Co.,  49  N.  J.  Eq.  217. 

Individual  stockholders  are  not  the  proper  parties  to  sue  or  defend  on 
behalf  of  corporate  interests  without  the  consent  of  a  legal  majority  of 
the  stockholders:   Silk  Mfg.  Co.  v.  Campbell,  27  N.  J.  Law,  539. 

But  a  stockholder  may  sue  in  equity  in  his  own  name  to  enforce  a 
right  of  the  corporation,  without  first  requesting  the  directors  to  sue, 
when  it  is  made  to  appear  that  if  such  request  had  been  made  it  would 
have  been  refused,  or,  if  granted,  that  the  litigation  following  would 
necessarily  be  subject  to  the  control  of  persons  opposed  to  its  success; 
Knoop  V.  Bohmrich,  49  N.  J.  Eq.  82;  Ackerman  r.  Halsey,  37  N.  J.  Eq. 
356;  s.  c,  38  N.  J.  Eq.  501. 

A  corporation  may  sue  for  a  libel  against  it  in  its  business,  but  special 
damages  must  always  be  shown:  Trenton  Mut.  Life  Ins.  Co.  v.  Perrine, 
23  N.  J.  Law,  402. 

A  corporation  may  be  sued  for  a  tort  in  which  the  element  of  evil  intent 
is  involved.  It  may  be  sued  for  malicious  prosecution,  for  libel  and  for 
assault  and  battery:  State  v.  Passaic,  etc.,  Soc,  54  N.  J.  Law.  260.  265; 
Vance  v.  Ry.  Co.,  32  N.  J.  Law,  334;  McDermott  v.  Evening  Journal 
Assn.,  43  N.  J.  Law,  488;  44  N.  J.  Law,  430;  Brokaw  v.  Ry.  Co..  32  N.  J. 
Law,  328. 

A  corporation  is  liable  for  the  torts  of  its  agents  and  is  liable  for  the 
acts  of  its  agents  done  by  its  authority,  express  or  implied:  State  :'.  Ry. 
Co.,  23  N.  J.  Law,  360:  Brokaw  v.  Ry.  Co.,  32  N.  J.  Law,  328. 

A  corporation  cannot  defend  itself  in  an  action  for  a  tort  done  by  it 
on  the  ground  that  the  business  in  the  prosecution  of  which  the  tort  was 
done  was  ultra  vires:  N.  Y.,  L.  E.  &  W.  R.  R.  Co.  v.  Haring,  47  N.  J. 
Law,  137. 

A  corporation  may  be  sued  on  an  implied  contract:  Worrell  v.  ist  Pres. 
Church,  23  N.  J.  Eq.  96,  and  cases  cited. 

Common  SeaL 

3.  The  general  rule  is  that  a  corporation  need  use  its  seal  only  in  cases 
where  it  would  be  essential  for  an  individual  to  use  a  seal.  The  old 
common-law  idea  that  a  corporation  can  act  only  under  its  corporate 
seal  no  longer  prevails:    Crawford  v.  Longstreet,  43  N.  J.  Law,  325:  see 


CORPORATION    LAW    OF    DELAWARE.  7 

also  Bap.  Church  v.  Mulford,  8  N.  J.  Law,  182;  Mendham  v.  Losey,  2 
N.  J.  Law,  227. 

In  Deringer's  Admr.  v.  Deringer's  Admr.,  5  Houst.  416,  Wales,  J.: 
"It  was  laid  down  by  Blackstone  and  the  notion  prevailed  for  some 
time  that  a  corporation  could  not  make  a  parol  contract,  and  could 
speak  and  act  only  by  its  common  seal;  but  this  technical  rule  of 
the  common  law  soon  gave  way  and  vanished,  and  to-day  a  seal  is  no 
more  necessary  to  render  valid  the  acts  and  contracts  of  a  corporation 
than  of  an  individual,  and  in  all  cases  where  a  natural  person  would  be 
bound  without  a  seal,  a  corporation  would  also  be  bound." 

For  the  transaction  of  any  business  of  an  incorporated  company  which 
requires  no  seal,  the  company  may  appoint  an  agent  without  the  use  of  its 
corporate  seal  or  even  of  any  writing:  Bancroft  v.  Wil.  Conf.  Academy, 
5  Houst.  577. 

If  the  president  of  an  incorporated  company  which  has  no  seal  executes 
articles  of  agreement  as  president  of  it,  under  his  hand  and  a  common 
scroll  for  a  seal,  it  will  neither  be  his  own  individual  covenant,  nor  the 
covenant  of  the  company;  but  it  seems  the  plaintiff  could  recover  under 
another  form  of  action:  McCaulley  v.  Jenney,  5  Houst.  32. 

No  words  of  "in  testimonium,"  nor  any  words  referring  to  the  seal  at 
all,  are  necessary  to  the  validity  of  an  instrument  under  seal  of  a  corpo- 
ration. When  the  common  seal  of  a  corporation  appears  to  be  affixed 
to  an  instrument,  and  the  signature  of  a  proper  officer  is  proved  or  ad- 
mitted, this  is  prima  facie  evidence  that  the  seal  was  affixed  with  proper 
authority,  and  although  it  may  be  controverted,  the  burden  of  proof  rests 
on  the  party  objecting  to  it:    Conine  v.  J.  &  B.  R.  R.  Co.,  3  Houst.  288. 

The  appearance  of  a  corporate  seal  to  an  instrument  is  presumptive 
evidence  that  it  was  affixed  by  proper  authority.  The  presumption  may 
be  rebutted,  but  the  burden  is  on  the  party  objecting:  Manhattan  Mfg. 
Co.  V.  N.  J.  Stock  Yard  Co.,  8  C.  E.  Green,  162;  Parker  v.  Washoe  Mfg. 
Co.,  49  N.  J.  L.  465. 

It  is  not  necessary  to  use  wax  or  wafer.  An  impression  of  the  seal  on 
the  paper  is  sufficient. 

Primarily  the  corporate  character  of  the  seal  must  be  proved. 

It  requires  evidence  to  substantiate  its  character:  Manhattan  Co.  v. 
N.  J.  Stock  Yard  Co.,  23  N.  J.  Eq.  162;  Leggett  v.  N.  J.  Mfg.  Co.,  i  N.  J. 
Eq.  541;  Vaughn  v.  Hankinson's  Admr.,  35  N.  J.  Law,  79;  Den  v.  Vree- 
landt,  7  N.  J.  Law,  352. 

No  presumption  of  authority  arises  from  the  use  of  a  common  paper 
seal  not  on  its  face  appearing  to  be  the  corporate  seal,  although  accom- 
panied by  the  recitation  "witness  the  corporate  seal:"  Raub  v.  Blairstown 
Creamery  Assn.,  56  N.  J.  Law,  264.  There  are  two  essential  elements  in 
the  proof  of  a  corporate  deed — that  the  seal  is  the  seal  of  the  company; 
that  it  was  affixed  by  authority:  Osborne  v.  Tunis,  25  N.  J.  Law,  635. 
For  further  cases  relative  to  corporate  seal  and  its  proof  see  Parker  v. 
Washoe  Mfg.  Co.,  49  N.  J.  Law,  465;  Whitehead  v.  Hamilton  Rubber  Co., 
52  N.  J.  Eq.  78. 


8  CORPORATION    LAW    OF    DELAWARE. 

May  Acquire  Property. 

4.  It  would,  in  many  cases,  be  well  to  insert  in  the  certifi- 
cate of  incorporation  as  one  of  the  general  powers,  the  power 
to  buy  and  sell  and  deal  in  real  estate,  as  otherwise  it  might 
be  difficult  to  show  that  any  particular  piece  of  real  estate  is 
required  for  the  purposes  of  the  corporation. 

It  seems  that  only  the  state  can  question  the  power  of  a  corporation  to 
hold  real  estate  on  the  ground  that  its  property  already  exceeds  the 
amount  limited  by  its  certificate  of  incorporation:  State  v.  Mansfield, 
23  N.  J.  Law,  510;  De  Camp  v.  Dobbins,  2  Stew.  Eq.  36;  American  Dock 
Co.  V.  Trustees  of  Public  Schools,  12  Stew.  Eq.  409;  except  perhaps  a 
devise  of  lands  to  a  corporation,  where  the  court  allowed  the  question  to 
be  raised  by  an  heir-at-law  in  a  suit  in  chancery:  De  Camp  v.  Dobbins, 
29  N.  J.  Eq.  36;  s.  c,  31  N.  J.  Eq.  671. 

Grants  to  a  private  corporation  are  strictly  construed:  Penna.  R.  R. 
Co.  V.  National  Railway  Co.,  8  C.  E.  Green,  441;  Easton  &  Amboy  R.  R. 
Co.  V.  Inhabitants  of  Greenwich,  10  C.  E.  Green,  565. 

A  corporation  may  hold  title  to  lands  in  fee  simple,  even  though  the 
period  of  the  corporation's  existence  is  limited:  State  v.  Brown,  27  N. 
J.  Law,  13;  State  v.  Height,  35  N.  J.  Law,  178;  s.  c,  36  N.  J.  Law,  471. 

As  to  power  to  grant  easements  see  State  v.  Elizabeth,  39  Atl.  Rep.  183. 

Agents. 

5.  The  corporation  may  appoint  agents  and  factors  as  may 
be  deemed  necessary  for  such  terms  as  may  be  prescribed  by 
the  by-laws,  or  determined  by  the  board  of  directors.  See 
section  22,  post. 

Appointment  of  agent  need  not  necessarily  be  under  seal:  Bancroft  v. 
Wil.  Conf.  Academy,  5  Houst.  577.  See  Sections  21  and  22,  post,  and 
notes. 

The  acts  of  an  agent  in  the  general  course  of  his  employment  are  evi- 
dence against  the  principal,  without  proof  that  they  were  done  by  his 
orders:   Waples  v.  Waples,  i  Harr,  474. 

A  corporation  being  a  creation  of  the  law  and  an  artificial  person,  can 
only  act  by  agents,  and  all  its  instrumentalities  are  agents  from  its  high- 
est to  its  lowest  officers  and  servants.  A  special  agent  is  one  who  is 
authorized  to  do  some  special  thing,  whilst  a  general  agent  is  one  who 
is  authorized  to  transact  all  his  principal's  business,  or  all  of  his  princi- 
pal's business  of  some  particular  class  or  kind.  If  a  special  agent  exceeds 
his  authority  his  principal  is  not  bound;  but  if  a  general  agent  exceeds 
his  authority  his  principal  is  bound,  provided  the  agent  acted  within  the 
ordinary  and  usual  scope  of  the  business  he  was  authorized  to  transact, 
and  the  party  dealing  with  the  agent  did  not  know  that  he  exceeded  his 
authority.     If  a  person  is  held  out  to  others,  or  to  the  public  at  large 


CORPORATION    LAW    OF    DELAWARE.  9 

by  his  principal  as  having  a  general  authority  to  act  for  him  in  a  par- 
ticular business  or  employment,  he  cannot  limit  his  authority  by  private 
or  secret  instructions.  In  such  case,  good  faith  requires  that  the  prin- 
cipal should  be  bound  by  the  acts  of  his  agent  done  within  the  ordinary 
and  usual  scope  of  the  employment  in  which  he  is  engaged  as  such  agent: 
Lattomus  v.  F.  M.  F.  I.  Co.,  3  Houst.  404. 

By-Laws. 

6.  As  to  the  power  of  making  and  altering  by-laws  see 
section  26,  post. 

By-laws  must  be  reasonable  as  well  as  legal:  i  Gr.  196;  Dayton  v. 
Quigley,  2  Stew.  Eq.  yy. 

By-laws  are  binding  upon  and  confer  rights  upon  members  of  the  cor- 
poration and  not  upon  third  persons  without  notice:  State  v.  Overton, 
24  N.  J.  Law,  440. 

Where  a  by-law  is  adopted  as  a  part  of  the  original  organization  of  the 
company,  and  the  subscriptions  of  stock  are  made  and  money  paid  thereon 
upon  the  strength  of  it,  it  becomes  a  fundamental  contract  between  the 
stockholders,  and  cannot  afterwards  be  altered,  even  though  a  general 
power  be  reserved  in  the  by-laws  to  make  alterations  therein.  Rights 
under  such  a  by-law  are  vested  in  the  stockholders  and  pass  to  each  new 
holder  of  stock  by  transfer:  Lowenthal  v.  Rubber  Reclaiming  Co.,  52 
N.  J.  Eq.  440. 

Dissolution. 

7.  The  method  of  dissolution  is  fully  provided  for  in  sec- 
tions 34,  35,  36,  2)7,  38  and  39.  Article  ix,  section  i,  of  the 
constitution  provides  that  the  general  assembly  shall  by  gen- 
eral law  provide  for  the  revocation  or  forfeiture  of  the  char- 
ters of  all  corporations  for  the  abuse,  misuse  or  non-user  of 
their  corporate  powers,  privileges  or  franchises,  and  that  any 
proceeding  for  such  revocation  or  forfeiture  shall  be  taken  by 
the  attorney-general  as  may  be  provided  by  law. 

No  such  general  law  has  yet  been  enacted  by  the  general 
assembly  except  section  62  of  this  act,  which  only  provides 
for  a  forfeiture  of  a  charter  for  failure  to  commence  business 
within  two  years  after  its  organization ;  and  except  also  sec- 
tions 10,  II  and  12  of  "An  act  to  raise  a  revenue  for  the  state 
by  taxing  certain  corporations,"  which  provide  that  a  charter 
shall  be  void  upon  the  failure  of  a  corporation  to  pay  state 
taxes. 

A  failure  to  elect  ofificers  does  not  work  a  dissolution  of  the 
corporation.     See  section  22,  post. 


lO  CORPORATION    LAW    OF    DELAWARE. 

A  corporation  is  not  dissolved  by  a  transfer  of  all  its  property  and 
stock:    Zinc  Co.  v.  Franklinite  Co.,  13  N.  J.  Eq.  z^i- 

A  corporation  may  be  dissolved  under  this  act  by  the  fol- 
lowing methods: 

1.  By  limitation,  if  specified  in  its  certificate  of  incorpora- 
tion :  section  7. 

2.  By  surrender  of  corporate  franchise  before  beginning 
business :  section  40. 

3.  By  voluntary  dissolution  by  the  directors  and  stockhold- 
ers, or  by  the  unanimous  consent  of  the  stockholders :  sec- 
tion 34. 

4.  By  forfeiture  for  failure  to  pay  taxes:  section  10  of  the 
"Act  to  raise  Revenue." 

5.  By  forfeiture  or  failure  to  commence  business :  sec- 
tion 62, 

ADDITIONAL  POWERS. 

Section  3.  In  addition  to  the  powers  enumerated  in  the 
second  section  of  this  act,  every  corporation,  its  officers,  di- 
rectors and  stockholders,  shall  possess  and  exercise  all  the 
powers  and  privileges  contained  in  this  act,  and  the  powers 
expressly  given  in  its  charter  or  in  its  certificate  under  which 
it  was  incorporated,  so  far  as  the  same  are  necessary  or  con- 
venient to  the  attainment  of  the  objects  set  forth  in  such 
charter  or  certificate  of  incorporation ;  and  shall  be  governed 
by  the  provisions  and  be  subject  to  the  restrictions  and  lia- 
bilities in  this  act  contained,  so  far  as  the  same  are  appropriate 
to  and  not  inconsistent  with  such  charter  or  act  under  which 
such  corporation  was  formed;  and  no  corporation  shall  pos- 
sess or  exercise  any  other  corporate  powers,  except  such  in- 
cidental powers  as  shall  be  necessary  to  the  exercise  of  the 
powers  so  given. 

By  the  general  incorporation  act  of  1883,  17  Del.  Laws. 
147,  three  or  more  persons  might  become  incorporated  for 
the  purpose  of  "carrying  on  any  manufacturing  business,  for 
the  business  of  preserving  animal  and  vegetable  food,  for 
draining  low  lands,  for  building  and  loan  associations  [for 
homestead  companies,  19  Del.  Laws,  701].  or  for  religious, 
charitable  and  literary  purposes." 


CORPORATION    LAW    OF    DELAWARE.  II 

It  has  long  been  apparent  that  a  general  incorporation  act 
should  be  passed  by  the  general  assembly  more  extensive  in 
its  scope  and  power,  so  as  to  include  corporations  other  than 
those  enumerated  above. 

To  meet  this  demand,  and  to  comply  more  nearly  with  the 
modern  legislation  respecting  corporations,  the  Constitu- 
tional Convention  of  1897  deprived  the  legislature  of  its 
power  to  grant  special  charters  (except  municipal,  banking, 
charitable,  penal,  reformatory  or  educational  corporations), 
and  required  that  all  corporations  should  be  created, 
amended,  renewed  or  revived  only  by  or  under  general  law. 
(Constitution,  article  ix,  section  i.) 

And  in  accordance  with  this  provision  of  the  constitution 
the  general  assembly  of  1899  passed  the  act  under  present 
consideration.  This  act  would  seem  to  apply  not  only  to 
corporations  formed  under  it,  but  to  pre-existing  corporations 
whether  created  by  the  legislature  or  under  the  general  act 
of  1883. 

At  common  law  a  corporation  created  by  charter  could  do  any  act  that 
an  individual  could  do,  whether  expressly  empowered  by  its  charter  to  do 
such  act  or  not.  For  an  abuse  of  its  powers  it  was  amenable  to  the 
sovereign  alone:    Riche  v.  Ashbury  Co.,  L.  R.  9  Exch.  224,  262. 

A  corporation  created  by  statute,  however,  is  precisely  what  the  organic 
act  makes  it.  For  every  function  it  claims  to  exercise  and  for  every 
power  it  assumes  to  possess  it  must  find  authority  in  legislative  grant: 
Watson  V.  Acquackanonck  Water  Co.,  36  N.  J.  Law,  195. 

There  are  two  sources  from  which  the  express  powers  of  a 
corporation  created  under  this  act  are  derived,  viz. : 

(i)  The  Act  Itself.  This  act  enumerates  the  cardinal  and 
fundamental  powers  of  all  corporations  and  the  necessities  of 
corporate  existence,  without  regard  to  the  particular  purposes 
of  a  corporation,  such  as  the  power  of  succession,  of  suing 
and  being  sued,  etc.     (Section  2.) 

It  also  grants  specific  powers  provided  they  are  properly 
named  and  set  out  in  the  certificate  of  incorporation,  instances 
of  such  being  the  power  to  consolidate  or  merge  and  to  own 
and  vote  the  stock  of  other  corporations. 

(2)  The  Certificate  of  Incorporation.  It  is  well  set- 
tled that  a  certificate  of  incorporation  obtained  under  a  gen- 
eral act  becomes  the  charter  of  the  company  and  taken  in  con- 
nection with  the  act  itself,  is  the  equivalent  of  the  former 
special  act  of  the  legislature:    Ellerman  v.  Chicago,  etc.,  Co., 


12  CORPORATION    LAW    OF    DELAWARE. 

49  N.  J.  Eq.  217,  240-241 ;  Oregon  R.  R.  Co.  v.  Oregonian 
R.  R.  Co.,  130  U.  S.  I.  In  view  of  this  fact  and  of  Section  8, 
post,  empowering  a  corporation  to  embody  in  the  certificate, 
provisions  "creating  and  deHning  the  powers  of  the  corpora- 
tion," there  seems  to  be  a  delegation  of  the  law-making 
power  of  the  state  to  the  corporators. 

In  speaking  of  a  provision  of  the  New  Jersey  act,  similar 
to  Section  8,  Mr.  Dill  says :  "This  is  perhaps  an  innovation 
in  general  enabling  acts,  and  if  the  word  'create'  is  to  be  given 
its  usual  and  ordinary  meaning  it  is  as  though  the  legislature 
has  endowed  the  corporators  with  the  law-making  power, 
enabling  them  to  give  the  corporation  such  powers  as  they  see 
fit,  provided  only  that  such  powers  are  not  inconsistent  with 
the  act  itself.  In  other  words,  unless  a  power  is  expressly  or 
impliedly  forbidden  by  the  statute  it  may  be  created  under  this 
Section :"   Dill's  Corporation  Act  of  New  Jersey. 

IMPLIED  POWEKS. 

"No  corporation  shall  possess  or  exercise  any  other  cor- 
porate powers,  except  such  incidental  powers  as  shall  be 
necessary  to  the  exercise  of  the  powers  so  given."  (Sec- 
tion 3.) 

"Power  necessary  to  a  corporation  does  not  mean  simply  power  which 
is  indispensable  ...  a  power  which  is  obviously  appropriate  and  con- 
venient to  carry  into  effect  the  franchise  granted  has  always  been  deemed 
a  necessary  one.  ...  In  short,  the  term  comprises  a  grant  of  the  right 
to  use  all  the  means  suitable  and  proper  to  accomplish  the  end  which 
the  legislature  had  in  view  at  the  time  of  the  enactment  of  the  charter:" 
State  R.  R.  Co.  v.  Hancock,  35  N.  J.  Law,  537.  See  also  McCuUoch  v. 
Maryland,  4  Wheat.  316,  414;  Olmstead  v.  Morris  Aqueduct,  47  N.  J. 
Law,  311;  Crawford  v.  Longstreet,  43  N.  J.  Law,  325;  Morris  Canal  Co. 
V.  Love,  27  N.  J.  Law,  60. 

"The  general  corporation  act  confers  on  the  company  certain  powers, 
the  certificate  contemplates  others,  and  incidental  powers  follow,  not  only 
with  respect  of  the  general  but  also  of  the  special  powers:"  Ellerman  v. 
Chicago  Junction  Ry.,  etc.,  Co.,  49  N.  J.  Eq.  217,  241. 

As  an  example  of  implied  power  a  corporation  is  impliedly  authorized 
to  borrow  money  and  has  the  incidental  power  to  give  security  for  its 
repayment,  and  to  make  negotiable  notes,  and  to  endorse  notes  loaned  to 
it  for  its  accommodation:  Lucas  v.  Pitney,  27  N.  J.  Law,  221;  Fifth  Ward 
Sav.  Bank.  v.  First  Nat.  Bank,  48  N.  J.  Law,  513;  Blake  v.  Domestic  Mfg. 
Co.,  38  Atl.  Rep.  241. 

A  corporation  has  no  power  to  become  a  party  to  bills  or  notes  for 


CORPORATION    LAW    OF    DELAWARE.  I3 

the  accommodation  of  others.  When,  however,  a  corporation  has  power, 
under  any  circumstances,  to  issue  negotiable  paper,  a  bona  fide  holder  has 
the  right  to  presume  that  it  was  issued  imder  the  circumstances  which 
give  the  requisite  authority,  and  such  paper  is  no  more  liable  to  be  im- 
peached for  any  infirmity  in  the  hands  of  such  a  holder  than  any  other 
commercial  paper:    lb. 

What  a  corporation  may  or  may  not  do  within  its  grant  of  powers  is 
to  be  determined  by  the  reasonable  intendments  of  its  charter  as  well  as 
its  clear  expressions  of  authority:  Brooklyn  Heights  R.  R.  Co.  v.  City 
of  Brooklyn,  152  N.  Y.  244. 

An  act  which  is  lawful  in  itself  and  not  otherwise  prohibited,  and  which 
is  done  for  the  purpose  of  serving  corporate  ends,  and  is  reasonably  tribu- 
tary to  the  promotion  of  those  ends  in  a  substantial,  and  not  in  a  remote 
and  fanciful  sense,  may  fairly  be  considered  within  the  corporate  powers: 
Steinway  v.  Steinway  &  Sons,  17  Misc.  43. 

A  corporation,  in  order  to  attain  its  legitimate  objects,  may  deal  pre- 
cisely as  an  individual  may,  who  seeks  to  accomplish  the  same  ends: 
Barry  v.  Merchants'  Exchange  Co.,  i  Sandf.  Chan.  289;  SafTord  v. 
Wycoff,  4  Hill,  422. 

The  directors  have  power  to  make  any  contract  which  may  be  neces- 
sary, fit  or  proper  to  enable  the  corporation  to  accomplish  the  purposes 
of  its  creation.  The  question  of  the  expediency  of  any  contract  which  is 
within  the  power  of  the  corporation,  is  committed  to  the  managers:  Park 
V.  Grant  Locomotive  Works,  13  Stew.  Eq.  114. 

Unless  restrained  by  law,  every  corporation  has  the  incidental  power 
to  make  any  contract  necessary  to  advance  the  objects  for  which  it  was 
created:    Legrand  v.  Manhattan  Mer.  Assn.,  80  N.  Y.  638. 

A  manufacturing  corporation  has  no  power  to  endorse  accommodation 
notes:   Nat.  Park  Bank  v.  G.  A.  M.  W.  &  S.,  116  N.  Y.  281. 

POWERS  DENIED. 

Section  4.  No  corporation  created  under  the  provisions  of 
this  act  shall,  by  any  implication  or  construction,  be  deemed 
to  possess  the  power  of  discounting  bills,  notes  or  other  evi- 
dences of  debt,  of  receiving  deposits  of  money,  of  buying  gold 
and  silver  bullion,  or  foreign  coins,  of  buying  and  selling  bills 
of  exchange,  or  of  issuing  bills,  notes  or  other  evidences  of 
debt,  upon  loan  or  for  circulation  as  money. 

This  section  is  practically  the  same  as  Section  3  of  the  gen- 
eral incorporation  law  of  1883. 

This  is  the  only  restriction  in  the  act  upon  banking  powers. 

Under  article  ix,  section  i,  of  the  constitution,  the  right 
to  charter  banks  still  remains  in  the  legislature. 


14  CORPORATION    LAW    OF    DELAWARE. 

The  above  (section  4)  is  similar  to  section  3  of  the  New 
Jersey  corporation  act,  anent  which  Mr,  Dill  says:  "This 
section  affects  in  no  way  the  power  of  a  corporation  to  issue 
and  receive  negotiable  paper  in  the  usual  course  of  business, 
or  for  any  purposes  incidental  to  the  legitimate  business  for 
which  the  company  was  formed :"  Dill's  Gen.  Corp.  Act  of 
N.  J.,  p.  12. 

A  manufacturing  corporation  has  implied  power  to  make  negotiable 
paper,  but  no  power  to  become  a  party  to  accommodation  paper;  but 
such  paper  cannot  be  impeached  in  the  hands  of  a  bona  fide  holder  for 
value  who  acquired  it  before  maturity:  Bank  v.  Young.  Receiver,  5  Cent. 
Rep.  113. 

Section  5.  This  act  may  be  amended  or  repealed,  at  the 
pleasure  of  the  legislature,  but  such  amendment  or  repeal 
shall  not  take  away  or  impair  any  remedy  against  any  corpo- 
ration created  under  this  act,  or  its  officers  for  any  liability 
which  shall  have  been  previously  incurred ;  this  act  and  all 
amendments  thereof  shall  be  a  part  of  the  charter  of  every 
such  corporation  except  so  far  as  the  same  are  inapplicable 
and  inappropriate  to  the  objects  of  such  corporation. 

It  is  no  longer  an  open  question,  but  well  settled,  that  the  legislature 
can  bind  the  state  by  contract  with  a  corporation  chartered  by  it,  not  to 
tax  for  a  given  time,  the  franchises,  or  property  of  such  corporation 
further  than  is  agreed  on  in  the  charter.  Such  a  charter  is  a  contract 
between  the  state  and  the  corporators,  which  is  protected  by  the  Con- 
stitution of  the  United  States,  and  is  inviolable;  and  an  agreement  to 
limit,  or  restrain  the  power  of  the  state  to  impose  further  taxes  on  the 
franchises  of  a  corporation  during  the  continuance  of  its  charter,  may 
enter  into  such  a  contract  and  have  binding  force. 

Such  a  contract  for  exemption  from  taxation,  however,  will  not  be 
implied;  though  it  will  be  enforced  when  clearly  expressed. 

The  property  of  banking  corporations  is,  the  franchise,  or  right  to  do 
banking  business  within  the  limits  of  their  charter;  their  capital  invested 
in  such  business,  their  surplus  earnings  set  apart  undivided,  and  such 
other  property  real  and  personal,  as  they  may  be  authorized  to  have,  all 
of  which  is  liable  to  taxation  like  the  property  of  individuals,  unless  it  is 
otherwise  agreed  upon  in  their  charter. 

The  bonus  to  the  state  is  the  price  paid  for  the  franchise,  or  power  to 
do  banking  business:  State  of  Delaware  v.  President.  Directors  and  Com- 
pany of  the  Bank  of  Smyrna,  2  Houst.  99. 

The  charter  of  a  railroad  company  is  a  contract  between  the  state  and 
the   company   within   the   prohibitory   clause   of  the    Constitution   of  the 


CORPORATION    LAW    OF    DELAWARE.  I5 

United  States  which  declares  that  no  state  shall  pass  any  law  impairing 
the  obligation  of  contracts.  And  an  act  of  the  legislature  having  the 
effect  to  abridge  or  restrict  any  power  or  privilege  vested  by  the  charter 
which  is  material  to  the  beneficial  exercise  of  the  franchise  granted,  with- 
out the  reservation  of  the  right  to  pass  such  act,  and  passed  without  the 
consent  of  the  company  impairs  the  obligation  of  the  contract,  and  is 
invalid. 

The  police  power  of  the  state  comprehends  all  those  general  laws  of 
internal  regulation  which  are  necessary  to  secure  the  peace,  good  order, 
health  and  comfort  of  society,  but  the  proper  limit  in  its  bearing  upon 
chartered  rights  and  privileges  of  private  corporations  for  public  uses, 
would  seem  to  be  this:  that  the  legislature  may  at  all  times  regulate  the 
exercise  of  the  corporate  franchise,  by  genera!  laws  passed  in  good  faith 
for  the  legitimate  ends  contemplated  by  the  state  police  power,  that  is, 
for  the  peace,  good  order,  health,  comfort  and  welfare  of  society,  but  it 
cannot,  under  the  color  of  such  laws,  destroy  or  impair  the  franchise 
itself,  nor  any  of  those  rights  or  powers  which  are  essential  to  the  bene- 
ficial exercise  of  it:    P.  W.  &  B.  R.  R.  Co.  v.  Bowers,  4  Houst.  506,  507. 

An  act  of  incorporation  either  for  public  or  private  purposes  is,  both  in 
form  and  substance  a  contract,  within  the  constitutional  provision  that 
no  state  shall  impair  the  obligation  of  a  contract:  Baily  v.  P.  W.  &  B. 
R.  R.  Co.,  4  Harr.  389-399. 

Rights  legally  vested  in  a  corporation  cannot  be  controlled  or  destroyed 
by  any  subsequent  statute,  unless  a  power  for  that  purpose  be  reserved 
in  the  act  of  incorporation:    lb.,  401. 

A  private  incorporation  is  a  contract  between  the  state  and  the  cor- 
porators; and  therefore  the  legislature  cannot  compel  persons  to  become 
an  incorporated  body;  or  against  their  consent,  impair,  alter  or  repeal 
the  rights  and  privileges  conferred  by  the  charter:  Rice  v.  Foster,  4  Harr. 
491,  492. 

When  property  or  rights  have  been  acquired  or  become  vested,  no 
amendment  or  alteration  of  the  charter  can  take  away  the  property  or 
rights  which  have  become  vested  under  a  legitimate  exercise  of  the 
powers  granted:  Albany  R.  R.  Co.  v.  Brownell,  24  N.  Y.  345;  People  v. 
O'Brien,  in  N.  Y.  i;  lb..  11  N.  Y.  52. 

Section  6.  Any  corporation  created  under  this  act  may 
conduct  business  in  this  state,  other  states,  the  Di.strict  of 
Columbia,  the  territories  and  colonies  of  the  United  States 
and  foreign  countries,  and  have  one  or  more  ofifices  out  of  this 
state,  and  may  hold,  purchase,  mortgage  and  convey  real  and 
personal  property  out  of  this  state ;  provided,  such  powers  are 
included  within  the  objects  set  forth  in  its  certificate  of  in- 
corporation. 


l6  CORPORATION    LAW    OF    DELAWARE. 

This  is  the  statutory  provision  authorizing  a  corporation 
chartered  in  this  state  to  transact  business  and  hold  real 
estate  outside  of  the  state ;  therefore  where  this  power  is  de- 
sired, it  is  necessary  to  insert  it  specifically  in  the  certificate. 

Any  corporation  acquiring  property  in  other  states  or  for- 
eign countries  should  also  consult  the  statutes  of  the  state  or 
country  in  which  the  property  is  located. 

Every  power  which  a  corporation  exercises  in  another  state  depends 
for  its  vahdity  upon  the  laws  of  the  sovereignty  in  which  it  is  exercised, 
and  a  corporation  can  make  no  valid  contract  without  the  sanction,  ex- 
press or  implied,  of  such  sovereignty:  Runyan  v.  Lessee  of  Coster,  14 
Peters  (U.  S.),  129;  Briscoe  v.  Southern  Kansas  Ry.  Co.,  40  Fed.  Rep. 
280. 

THE  CERTIFICATE. 

Section  7.  The  certificate  of  incorporation  shall  set  forth : 

Corporate  Name. 

1.  The  name  of  the  corporation,  which  shall  be  such  as  to 
distinguish  it  from  any  other  corporation  engaged  in  the 
same  business,  or  promoting  or  carrying  on  the  same  objects 
or  purposes  in  this  state. 

Principal  Office. 

2.  The  name  of  the  city  or  town,  county  or  place  \vithin 
the  county  in  which  its  principal  office  or  place  of  business  is 
to  be  located,  in  this  state. 

Nature  of  Business. 

3.  The  nature  of  the  business,  or  objects  or  purposes  pro- 
posed to  be  transacted,  promoted  or  carried  on. 

Capital  Stock. 

4.  The  amount  of  the  total  authorized  capital  stock  of  the 
corporation,  which  shall  not  be  less  than  two  thousand  dol- 
lars, the  number  of  shares  in  which  the  same  is  divided  and 
the  par  value  of  each  share ;  the  amount  of  capital  stock  with 
which  it  will  commence  business  which  shall  not  be  less  than 
one  thousand  dollars ;  and  if  there  be  more  than  one  class  of 
stock  created  by  the  certificate  of  incorporation,  a  description 
of  the  different  classes  witli  the  terms  on  which  the  respective 


CORPORATION    LAW    OF    DELAWARE.  1/ 

classes  of  stock  are  created.  Provided,  however,  that  the  pro- 
visions of  this  paragraph  shah  not  apply  to  religious  or  liter- 
ary corporations,  unless  it  is  desired  to  have  a  capital  stock; 
in  case  any  religious  or  literary  corporation  desires  to  have 
no  capital  stock  it  shall  be  so  stated,  and  the  conditions  of 
membership  shall  be  also  stated. 

K'ames  and  Residences  of  Incorporators. 

5.  The  names  and  places  of  residence  of  each  of  the  original 
subscribers  to  the  capital  stock,  or  if  there  be  no  stock,  of  the 
original  corporators. 

Perpetual  Existence. 

6.  Whether  or  not  the  corporation  is  to  have  perpetual  ex- 
istence, if  not  the  time  when  its  existence  is  to  commence  and 
the  time  when  its  existence  is  to  cease. 

Officers. 

7.  By  what  officers  or  persons  the  affairs  of  the  corporation 
are  to  be  conducted  and  the  time  and  place  at  which  they  are 
to  be  elected. 

Value  of  Real  and  Personal  Estate. 

8.  The  value  of  real  and  personal  estate  of  which  the  corpo- 
ration may  become  seized  and  possessed. 

Indebtedness. 

9.  The  highest  amount  of  indebtedness  or  liability,  which 
the  corporation  may  at  any  time  incur. 

Personal  Liability  of  Stockholders. 

10.  Whether  the  private  property  of  the  stockholders,  not 
subject  by  the  provisions  of  the  law  under  which  it  is  or- 
ganized, shall  be  subject  to  the  payment  of  corporate  debts, 
and  if  so,  to  what  extent. 

Corporate  Name. 

I.  Where  two  corporations  created  by  different  states  exist  under  the 

same  name,  one  maintaining  a  steamboat  line  as  a  common  carrier  and 

renting  and  occupying  land  owned  by  the  other,  the  latter  is  not  liable  as 

a   common    carrier  for   property   delivered   to   the   former,   unless   it   per- 

2 


l8  CORPORATION    LAW    OF    DELAWARE. 

mitted  some  other  company  to  use  its  corporate  name,  and  held  itself  out 
to  the  general  public  as  transacting  said  business:  Reed  v.  Wilmington 
Steamboat  Co.,  i  Marvel,  Del.  193. 

A  contract  is  not  void  because  the  corporation  with  which  it  is  made 
is  misnamed  therein:  Hoboken  Bldg.  Assn.  v.  Martin,  13  N.  J.  Eq.  427; 
Woolwich  V.  Forrest,  2  N.  J.  Law,  107;  Middletown  v.  McCormick,  3  N.  J. 
Law,  92.  See  also  (as  to  grants)  Inhabitants,  etc.,  Alloway's  Creek  v. 
String,  10  N.  J.  Law,  323;  Den  v.  Hay,  21  N.  J.  Law,  174,  and  (as  to  be- 
quests). Van  Wagenen  v.  Baldwin,  7  N.  J.  Eq.  211;  McBride  v.  Elmer, 
-6  N.  J.  Eq.  107;  Goodell  v.  Union  Assn.,  29  N.  J.  Eq.  32;  Lanning  v.  Sis- 
ters of  St.  Francis,  35  N.  J.  Eq.  392. 

It  was  held  in  Alexander  v.  Berney,  28  N.  J.  Eq.  90,  that  "a  corporation 
may  assume  a  name  by  usage."  (For  a  somewhat  similar  case  see  Den 
I'.  Holmes,  3  N.  J.  Law,  600.) 

The  right  to  the  exclusive  use  of  a  name  will  be  protected  upon  the  same 
principle  that  persons  are  protected  in  the  use  of  trade-marks:  State  v. 
McGrath,  5  S.  W.  Rep.  29. 

The  secretary  of  state  must  decide  in  the  first  instance  whether  the  pro- 
posed name  is,  or  is  not  within  the  statutory  prohibition:    lb. 

A  corporation  cannot  acquire  the  name  of  one  of  its  incorporators  and 
make  use  of  it  to  deceive  the  public,  on  the  ground  that  such  is  the  true 
name  of  one  of  its  incorporators,  or  to  defraud  others  who  have  built  up 
a  business  under  the  same  name:  De  Long  v.  De  Long  Hook  &  Eye  Co., 
89  Hun,  399. 

Principal  Office. 

2.  All  corporations  created  under  this  act  must  have  a  prin- 
cipal office  in  this  state,  the  place  of  such  office  must  be 
designated  in  the  certificate.     See  section  136,  post. 

The  location  of  such  office  or  place  of  business  may  be 
changed  by  supplemental  certificate.  See  sections  135-138, 
post. 

Nature  of  Business. 

3.  Companies  may  be  formed  under  this  act  for  the  trans- 
action of  any  lawful  business,  or  to  promote  or  conduct  any 
legitimate  object  or  purpose,  with  the  following  exceptions : 
Municipal  corporations,  banks  or  corporations  for  charitable, 
penal,  reformatory,  or  educational  purposes. 

Mr.  Dill  treats  of  this  subject  in  his  admirable  work  on  the 
New  Jersey  corporation  law,  as  follows : 

"This  being  the  important  part  of  the  certificate  of  incorporation,  great 
care  should  be  taken  that  the  objects  and  purposes  of  the  company  are 
stated  in  the  fullest  and  clearest  manner  possible,  because  the  company 
cannot  undertake  any  business  not  authorized  by  its  charter,  and  not  even 


CORPORATION    LAW    OF    DELAWARE.  I9 

the  fiilltst  sanction  given  by  the  shareholders  will  make  valid  an  act  which 
is  outside  the  powers  of  the  company.  Directors  undertaking  any  such 
business  may  become  personally  liable  for  loss,  and  great  inconvenience 
follows  from  companies  having  too  limited  powers.  It  is  often  questioned 
how  far  it  is  necessary  to  detail  in  extenso  in  the  certificate  of  incorpora- 
tion the  powers  of  the  company.     The  answer  is  plain. 

"The  balance  of  disadvantage  decidedly  attaches  to  too  narrowly  defined 
objects. 

"It  is  easier  to  compress,  so  to  speak,  the  business  of  a  company  within 
the  limits  of  large  objects  and  broad  powers  than  to  develop  business  by 
extension  in  the  face  of  narrowly  defined  objects.  It  is  better  to  give 
latitude  to  the  objects  and  powers  as  contained  in  the  certificate  of  incor- 
poration, and  to  limit  the  powers  of  directors  by  the  by-laws,  than  to  run 
the  risk  of  subsequent  insertion  in  the  by-laws  or  in  the  minutes  of  the 
board  of  directors  of  a  provision  intended  to  meet  some  pressing  require- 
ments of  the  business,  which  provision  may  be  found  absolutely  worthless, 
because  of  variations  from  the  terms  of  the  certificate  of  incorporation. 

"It  is  customary  to  insert  some  general  words,  such  as  'in  general  to 
carry  on  any  other  business  whether  manufacturing  or  otherwise.'  But 
it  must  be  understood  that  the  courts  will  limit  such  words  to  cover  only 
operations  of  a  nature  similar  to  the  business  previously  mentioned,  and 
will  not  include  any  wholly  fresh  business. 

"It  is  often  sought  to  broaden  the  powers  by  inserting  such  words  as, 
'to  do  any  other  business  which  the  company  from  time  to  time  deter- 
mine.' But  it  is  doubtful  whether  this  adds  anything  to  the  powers  of 
the  company. 

The  words  would  probably  be  construed  by  the  courts  to  be  of  no  effect, 
as  not  being  a  statement  of  what  the  objects  or  purposes  of  the  company 
are." 

Capital  Stock. 

4.  There  is  no  limit  to  the  amount  of  capital  stock  which  a 
corporation  formed  under  this  act  may  have. 

It  should  be  noted  that  $i,ooo  is  the  smahest  amount  of 
capital  stock  that  must  be  subscribed  before  commencing 
business,  which  need  not  necessarily  be  paid  in.  (See  sec- 
tions 13-16,  29,  post.) 

Where  there  is  more  than  one  kind  of  stock  the  certificate 
of  incorporation  should  contain  the  designation  and  descrip- 
tion of  each  class  and  state  the  terms  on  which  each  class  is  to 
be  issued.  Preferred  stocks  may,  if  desired,  be  made  subject 
to  redemption  at  not  less  than  par  at  a  fixed  time  and  price 
(section  137).  Dividends  on  preferred  stock  may  be  fixed 
at  any  rate  not  exceeding  eight  per  cent.  Special  voting 
powers  may  be  given  to  the  holders  of  any  class  of  stock. 


20  CORPORATION    LAW    OF    DELAWARE. 

For  a  description  of  some  of  the  kinds  of  preferred  stock 
which  may  be  created  see  notes  to  section  137,  post. 

Names  and  Besidences  of  Incorporators. 

5.  There  must  be  at  least  three  incorporators,  who  must 
be  natural  persons,  who  need  not  necessarily  be  residents  of 
the  state  of  Delaware. 

It  is  the  better  practice  to  have  all  the  original  subscribers 
sign  the  certificate,  as  well  as  the  original  corporators. 

The  certificate  of  incorporation  should  contain  definite 
statement  that  the  parties  signing  the  same  "are  all  of  the 
original  corporators"  as  well  as  the  statement  that  "they  are 
all  of  the  original  subscribers." 

In  New  Jersey  it  has  been  held  that  a  general  law  authorizing  any  num- 
ber of  persons,  not  less  than  seven,  to  form  a  corporation  to  construct 
a  railroad,  does  not  exclude  non-residents  as  corporators:  Central  R.  R. 
Co.  V.  Penn.  R.  R.  Co.,  4  Stew.  Eq.  475. 

Perpetual  Existence. 

6.  Under  the  law  of  1883  the  period  of  corporate  existence 
could  not  exceed  twenty  years,  but  by  virtue  of  this  act  per- 
petual existence  can  now  be  secured  by  a  statement  to  that 
effect  in  the  certificate.  If,  however,  a  corporation  elects  to 
limit  its  existence,  section  129,  post,  provides  a  method  for 
renewing  and  continuing  its  existence. 

On  the  dissolution  of  a  corporation,  its  real  estate  reverts  to  the  grantor, 
its  personal  estate  vests  in  the  people;  and  the  debts  due  to  it  are  extin- 
guished. 

The  legislature  cannot  revive  these  debts  by  renewing  the  charter  after 
the  corporation  has  been  dissolved  by  its  expiration:  Com.  Bank  v. 
Lock-wood's  Admr.,  2  Harr.  8. 

Officers. 

7.  The  business  of  every  corporation  organized  under  this 
act  shall  be  managed  by  a  board  of  not  less  than  three  direct- 
ors.    (See  section  20.) 

The  directors  of  a  corporation,  acting  within  the  defined  scope  of  their 
authority,  are,  virtually,  the  hand  of  the  company  doing  its  business,  and 
they  have  the  power  to  settle  and  dispose  of  the  claims  of  the  company: 
Del.  City  S.  &  P.  S.  N.  Co.  v.  Reybold.  8  Houst.  203. 

As  to  time  and  place  of  election  of  directors  see  section  20,  post. 


CORPORATION    LAW    OF    DELAWARE,  21 

Value  of  Real  and  Personal  Estate. 

8.  The  general  incorporation  law  of  1883  had  the  same  pro- 
vision as  this  act  in  this  particular,  and  the  established  prac- 
tice thereunder  was  to  name  specifically  the  value  of  the  real 
and  personal  estate  of  which  a  corporation  under  said  act 
might  become  seized  and  possessed. 

There  is  another  section  of  this  act  which  would  seem  to 
indicate  that  a  definite  amount  is  here  intended  to  be  fixed, 
viz. :  section  2,  subd.  iv,  which  authorizes  a  corporation  to 
hold,  purchase  and  convey  real  and  personal  estate  not  exceed- 
ing in  valne  the  amount  limited  in  its  charter. 

As  there  is  no  limit  to  the  amount  that  can  be  named,  it 
would  therefore  seem  advisable  to  state  in  the  certificate  a 
definite  sum,  rather  than  an  unlimited  amount. 

Indebtedness. 

9.  The  reasons  advanced  above  for  naming  a  specific  sum 
in  specifying  the  value  of  real  and  personal  property,  apply 
equally  to  naming  a  definite  sum  as  the  highest  amount  of 
liability  a  corporation  may  at  any  time  incur. 

Personal  Liability  of  Stockholders. 

10.  Where  the  whole  capital  of  a  corporation  shall  not  have 
been  paid  in,  and  the  capital  paid  shall  be  insufficient  to  satisfy 
the  claims  of  its  creditors,  each  stockholder  shall  be  bound  to 
pay  on  each  share  held  by  him  the  sum  necessary  to  complete 
the  amount  of  such  share,  as  fixed  by  the  charter  of  the  cor- 
poration, or  such  proportion  of  that  sum  as  shall  be  required 
to  satisfy  such  debts  and  obligations.  See  sections  14,  29  and 
44  post. 

This  is  the  extent  to  which  the  private  property  of  stock- 
holders is  subject  to  the  payment  of  corporate  debts,  unless 
such  liability  is  increased  by  the  certificate  of  incorporation. 

CREATING  AND  DEFINING  POWERS. 

Section  8.  The  certificate  of  incorporation  may  also  con- 
tain any  provisions  which  the  incorporators  may  choose  to 
insert  for  the  regulation  of  the  business  and  for  the  conduct 
of  the  affairs  of  the  corporation,  and  any  provisions  creating, 
defining,  limiting  and  regulating  the  powers  of  the  corpora- 
tion, the  directors  and  the  stockholders,  or  any  classes  of  the 


22  CORPORATION    LAW    OF    DELAWARE. 

Stockholders;  provided,  such  provisions  are  not  contrary  to 
the  laws  of  this  state. 

This  section  is  probably  one  of  the  most  important  of  the 
act,  and  closely  follows  the  New  Jersey  act  as  amended  in 
1898.  known  as  section  8,  subd.  7.  How  far  powers  may  be 
assumed  by  the  certificate  of  incorporation  has  not  as  yet  been 
determined  by  the  courts.  Apparently  powers  may  be  created 
and  defined  by  the  certificate,  which  is  tantamount  to  the 
making  of  law,  and  certainly  it  may  be  said  that  this  section 
grants  greater  powers  than  those  expressly  given  by  the 
general  act. 

"The  right  of  the  Legislature  to  bestow  on  corporations  the  power  of 
internal  regulation:  and  the  capacity  of  corporations  to  receive  and  exer- 
cise such  power,  even  though  it  involve  legislative  power  within  the 
corporate  limits,  exist  at  common  law:  Rice  v.  Foster.  4  Harr.  470-503.'' 

In  this  connection  j\Ir.  Dill  says  : 

"This  provision  may  also  be  construed  as  meaning  that 
whereas  incorporators  are  enabled  to  create  and  define  the 
powers  which  the  corporation  shall  possess,  in  addition  to 
those  given  by  section  i,  that  the  certificate  of  incorporation 
shall  then  become  the  measure  of  the  company's  powers,  and 
that  powers  not  expressly  or  impliedly  given  by  it  are  ex- 
cluded. 

"Various  limitations  and  regulations  of  the  powers  of  the 
corporation,  the  stockholders  and  the  directors  may  be  made ; 
power  may  be  given  to  the  directors  to  make  and  alter  by- 
laws ;  directors  may  be  classified ;  the  amount  of  interest 
required  to  be  represented  at  any  meeting  in  order  to  con- 
stitute a  quorum  may  be  prescribed ;  power  to  the  directors 
to  sell  or  mortgage  any  or  all  of  the  corporate  property  with- 
out the  assent  of  the  stockholders  or  with  the  assent  of  a 
majority  or  two-thirds  of  the  stockholders;  restrictions  on 
the  power  of  stockholders  to  examine  the  corporate  books  of 
account;  it  may  be  provided  that  each  stockholder  should 
have  one  vote  for  each  five  shares  of  stock  held  by  him  instead 
of  one  vote  for  each  share.  Other  similar  limitations  and 
regulations  might  be  made. 

"Of  late  years  there  have  come  to  the  courts  several  cases 
involving  the  legality  of  voting  pools  or  trusts.  (See  article 
in  31  American  Law  Review,  p.  236,  'Pooling  Contracts  and 
Public  Policy.')    Briefly  stated,  the  scheme  is  for  several  hold- 


CORPORATION    LAW    OF    DELAWARE.  23 

ers  of  shares  to  enter  into  an  agreement  to  transfer  their 
shares  to  a  trustee,  who  has  power  to  vote  on  them  and  to  the 
extent  of  the  shares  so  held  by  him,  by  the  election  of  direc- 
tors, dictate  the  policy  and  management  of  the  company. 

"The  trustee  issues  to  the  shareholders  in  exchange  for 
their  shares  trust  certificates,  which  are  usually  made  trans- 
ferable in  the  same  manner  as  stock.  The  duties  of  the 
trustee  are  fixed  by  the  trust  agreement. 

"Two  cases  involving  such  agreements  have  recently  come 
before  the  court  of  chancery  of  New  Jersey,  both  of  which 
were  decided  by  Vice-Chancellor  Pitney. 

"The  first  case  (Cone  v.  Russell,  48  N.  J.  Eq.  208)  was  de- 
cided in  1 89 1.  There  the  agreement  was  held  to  be  void 
because  the  objects  intended  to  be  derived  from  the  agree- 
ment were  bad  as  against  public  policy  and  the  carrying  out 
of  which  also  involved  a  breach  of  trust  by  one  of  the  parties. 
It  was  not  held  that  a  voting  trust  was  in  itself  void  as  against 
public  policy.  The  vice-chancellor  said:  'This  conclusion 
[that  the  contract  was  void  as  against  pubHc  policy]  does 
not  reach  so  far  as  to  necessarily  forbid  all  pooling  or  com- 
bining of  stock,  where  the  object  is  to  carry  out  a  particular 
policy  with  the  view  to  promote  the  best  interests  of  all  the 
stockholders.  The  propriety  of  the  objects  validates  the 
means  and  must  affirmatively  appear:"   lb.,  p.  215. 

"In  the  second  case  (White  v.  Thomas  Inflatable  Tire  Co., 
52  N.  J.  Eq.  178),  decided  in  1893,  the  agreement  was  de- 
clared to  be  invalid  because  it  did  not  by  its  terms  extend  to 
certain  shares  of  the  company  issued  directly  to  persons  who 
were  not  parties  to  the  agreement. 

"It  was  held  to  be  immaterial  whether  they  had  or  had  not 
notice  of  the  trust  agreement. 

"  *As  such  holders  they  were  entitled  to  have  the  other 
shares  of  stock  in  the  company  stand  upon  an  equal  footing,' 
and  they  were  deprived  of  all  voice  in  the  management  of  the 
company.  The  issuing  of  the  stock  was,  therefore,  held  to 
be  'a  waiver  and  abandonment  by  the  directors  who  united  in 
issuing  it,  of  their  rights  under  the  contract  in  question.' 

"In  the  latter  case,  although  there  is  a  general  dictum  to 
the  effect  that  all  such  trusts  are  illegal,  yet  the  court,  in  its 
actual  decision,  lays  stress  on  the  fact  that  the  'contracts  in 
question  were  not  made  a  part  of  the  certificate  of  organiza- 
tion or  incorporated  into  the  by-laws.' 

"From  these  two  cases  it  would  seem  that  voting  trusts, 


24  CORPORATION    LAW    OF    DELAWARE. 

where  the  object  was  in  itself  proper  and  lawful,  provision  for 
which  was  inserted  in  the  certificate  of  incorporation,  and 
formed  a  part  of  the  original  scheme  of  incorporation,  on  the 
basis  of  which  the  stock  was  issued,  and  the  certificate  of  stock 
contained  notice  of  the  trust,  might  be  upheld  by  the  courts, 
under  section  8,  subd.  7,  which  states  that  the  certificate 
of  incorporation  may  contain  any  provision  creating,  defining, 
limiting  and  regulating  the  powers  of  the  corporation,  the 
directors  and  the  stockholders,  or  any  class  or  classes  of  stock- 
holders; provided,  such  provision  be  not  inconsistent  with 
this  act."  Cumulative  voting  in  elections  of  directors  or 
managers  is  not  possible  in  Delaware  under  article  ix,  section 
6,  of  the  state  constitution. 

AUTHENTICATION  AND  RECOIID  OF  CERTIFICATE. 

Section  9.  The  certificate  shall  be  signed  and  sealed  by 
the  original  corporators,  or  a  majority  of  them,  and  shall  be 
acknowledged  before  any  officer  authorized  by  the  laws  of 
this  state  to  take  acknowledgments  of  deeds,  to  be  the  act 
and  deed  of  the  signers,  respectively,  and  that  the  facts  therein 
stated  are  truly  set  forth ;  said  certificate  shall  be  filed  in  the 
office  of  the  secretary  of  state,  who  shall  furnish  a  certified 
copy  of  the  same  under  his  hand  and  seal  of  office,  and  said 
certified  copy  shall  be  recorded  in  the  office  of  the  recorder 
of  deeds  of  the  county  where  the  principal  office  of  said  cor- 
poration is  to  be  located  in  this  state  in  a  book  to  be  kept  for 
that  purpose ;  said  certificate  or  a  copy  thereof  duly  certified 
by  the  secretary  of  state,  accompanied  with  the  certificate  of 
the  recorder  of  the  county  wherein  the  same  is  recorded  under 
his  hand  and  the  seal  of  his  office,  stating  that  it  has  been 
recorded,  the  record  of  the  same  in  the  of^ce  of  the  recorder 
aforesaid,  or  a  copy  of  said  record  duly  certified  by  the  re- 
corder aforesaid  shall  be  evidence  in  all  courts  of  law  and 
equity  in  this  state. 

The  acknowledgment  may  be  taken : 

Within  the  State  of  Delaware. 

In  the  superior  court,  or  before  the  chancellor  or  any  judge 
or  notary  public  or  before  two  justices  of  the  peace  for  the 
same  county. 


CORPORATION    LAW    OF    DELAWARE.  2$ 

Without  the  State  of  Delaware. 

Before  any  consul  general,  consul,  vice-consul,  consular 
agent  or  commercial  agent  of  the  United  States,  duly  ap- 
pointed in  any  foreign  country  at  the  places  of  their  respective 
ofificial  residence,  before  the  judge  of  any  district  or  circuit 
court  of  the  United  States,  or  the  chancellor,  or  any  judge 
of  a  court  of  record  of  any  state,  territory  or  country,  or  the 
mayor  or  chief  of^cer  of  any  city  or  borough,  and  certified 
under  the  hand  of  such  chancellor,  judge,  mayor  or  officer, 
and  the  seal  of  his  (office)  court,  city  or  borough  by  certificate 
indorsed  upon  or  annexed  to  the  certificate  of  incorporation, 
or  such  acknowledgment  or  proof  may  be  taken  in  any  such 
court  and  certified,  under  the  hand  of  the  clerk  or  other 
officer  of  said  court,  and  the  seal  of  said  court,  in  like  manner. 
In  case  of  such  certificate  by  a  judge,  the  seal  of  his  court  may 
be  affixed  to  his  certificate,  or  to  a  certificate  of  attestation 
of  the  clerk  or  keeper  of  the  seal.  Also  by  any  commissioner 
of  deeds  appointed  by  the  governor  in  any  of  the  states  or  ter- 
ritories of  the  United  States  or  in  the  District  of  Columbia; 
the  same  to  be  certified,  in  like  manner,  under  the  hand  and 
seal  of  the  said  commissioner  or  before  a  notary  public  of 
any  state  or  territory  or  of  the  District  of  Columbia:  Code 
625-627. 

AMENDMENTS  AND   ALTERATIONS. 

Section  io.  Amendments  and  alterations  of  the  original 
certificate  may  be  made  by  a  supplemental  certificate,  made, 
signed,  acknowledged,  filed  and  recorded  in  the  same  manner 
in  every  respect  as  is  provided  in  reference  to  the  original  cer- 
tificate. 

This  section  is  evidently  based  upon  the  last  paragraph  of 
section  ii  of  the  general  incorporation  act  of  1883,  and  is 
inconsistent  with  the  method  of  amendment  provided  by  sec- 
tion 135,  q.  V. 

DIRECTION  OF  AFFAIRS  BY  INCORPORATORS. 

Section  ii.  Until  the  directors  are  elected,  the  signers 
of  the  certificate  of  incorporation  shall  have  the  direction  of 
the  affairs  and  of  the  organization  of  the  corporation,  and  may 
take  such  steps  as  are  proper  to  obtain  the  necessary  subscrip- 


26  CORPORATION    LAW    OF    DELAWARE. 

tions  to  stock  and  to  perfect  the  organization  of  the  corpora- 
tion. 

WHEN  CORPORATE  EXISTENCE  BEGINS. 

Section  12.  Upon  making  the  certificate  of  incorporation 
and  causing  the  same  to  be  filed  and  a  certified  copy  thereof 
recorded  as  aforesaid,  and  paying  the  hcense  tax  therefor  to 
the  secretary  of  state,  the  persons  so  associating,  their  succes- 
sors and  assigns,  shall  from  the  date  of  such  filing,  be  and 
constitute  a  body  corporate,  by  the  name  set  forth  in  said  cer- 
tificate, subject  to  dissolution  as  in  this  act  elsewhere  pro- 
vided. 

An  express  acceptance  of  an  act  of  incorporation  is  not  essential  to  the 
corporate  existence,  unless  required  by  the  act.  An  acceptance  is  implied 
from  an  organization  of  the  corporators  and  the  exercise  of  corporate 
powers. 

An  act  incorporating,  without  condition,  persons  already  associated 
in  business,  having  been  granted  on  application,  and  ascertaining  the  cor- 
porators, vests  the  franchise  immediately,  subject  only  to  such  acceptance 
as  is  shown  by  the  exercise  of  the  franchise:  Logan  v.  McAllister,  Del. 
Chancery  Reports,  2,  p.  176. 

DE  FACTO  CORPORATIONS. 

The  law  on  this  point  is  stated  in  the  case  of  Stout  v.  Zulick  (48  N.  J. 
Law,  599,  601),  as  follows:  "In  the  absence  of  a  statutory  provision 
making  shareholders  liable  in  case  of  failure  to  comply  with  the  require- 
ments of  the  charter,  or  with  the  requirements  of  the  act  under  which 
the  company  is  incorporated,  persons  who  have  contracted  with  a  de 
facto  corporation,  as  a  corporation,  cannot  deny  its  corporate  existence 
in  order  to  charge  its  stockholders  individually  as  partners.  .  .  .  Where 
it  is  shown  that  there  is  a  charter  or  a  lazv  under  which  a  corporation  with 
the  powers  assumed  might  lawfully  be  incorporated,  and  there  is  a  color- 
ahk  compliance  with  the  requirements  of  the  charter  or  law,  and  a  user  of 
the  rights  claimed  under  the  charter  or  law,  the  existence  of  a  corpora- 
tion is  established. 

"And  it  is  entirely  settled  that  the  corporate  existence  of  such  corpo- 
ration de  facto  cannot  be  inquired  into  collaterally.  It  is,  as  to  all  who 
contract  with  it,  to  be  assumed  to  be  a  corporation  de  jure.  The  legality 
of  its  corporate  existence  may  be  inquired  into  by  the  state,  but  not  by 
any  one  else.  And  this  is  as  true  where  the  corporation  is  formed  under 
a  general  law  as  it  is  where  the  corporate  existence  is  claimed  under  a 
special  charter.  .  .  .  Had  this  suit  been  brought  against  the  com- 
pany it  could  not  have  denied  its  corporate  existence,  neither  can  the 


CORPORATION    LAW    OF    DELAWARE.  27 

plaintiffs,  who  contracted  with  it  as  a  corporation,  do  so."  See  also 
Hackensack  Water  Co.  v.  De  Kay,  36  N.  J.  Eq.  548;  Rafferty  Recr.  v. 
Bank  of  Jersey  City,  22>  N.  J.  Law,  368;  Stockton  v.  American  Tobacco 
Co.,  3,6  Atl.  Rep.  971. 

As  pointed  out  above  a  court  of  equity  is  not  the  proper  tribunal  to 
inquire  into  the  validity  of  such  organization.  The  action  must  be 
brought  in  a  court  of  law,  on  quo  warranto,  or  information  in  the  nature 
of  quo  warranto,  by  the  attorney-general  in  behalf  of  the  state. 

The  recording  and  filing  of  the  certificate  of  organization  are  not  con- 
ditions precedent  to  the  legal  existence  of  the  corporation.  They  ai-e 
merely  necessary  evidence  of  such  existence:  Vanneman  v.  Young,  23 
Vr.  403. 

CAPITAL  STOCK. 

Section  13.  The  capital  stock  shall  be  paid  in  such 
amounts  and  at  such  times  as  the  directors  may  require ;  and 
when  any  corporation  is  authorized  to  commence  business, 
it  may,  if  its  whole  capital  stock  has  not  been  subscribed,  open 
books  for  additional  subscriptions  to  its  capital  stock;  and 
when  any  stockholder  fails  to  pay  any  instalment  on  his  stock 
when  requested  by  the  directors,  they  may  sell  sui^cient  of 
the  stock  of  such  delinquent  at  public  sale  to  pay  the  amount 
due,  with  cost  and  interest,  having  first  given  him  twenty 
days'  notice  in  writing,  if  he  resides  in  the  county,  or,  if  not, 
by  letter  mailed  to  his  last  known  address,  of  the  time  and 
place,  when  and  where,  the  stock  will  be  sold,  or  they  may 
collect  it  by  action  at  law;  if  no  bidder  can  be  had  to  pay  the 
amount  due  on  the  stock  and  it  cannot  be  collected  then  said 
stock  may  be  forfeited  to  the  corporation  and  the  amount  pre- 
viously paid  in,  by  the  delinquent  on  the  stock  shall  be  for- 
feited to  the  corporation  by  order  of  the  board  of  directors, 
and  such  stock  sold  by  it,  within  one  year  from  the  time  of 
such  forfeiture ;  if  the  stock  is  sold,  and  there  remains  a  sur- 
plus after  the  payment  of  the  amount  due,  with  interest  and 
costs,  such  surplus  shall  be  paid  to  the  original  owner  of  the 
stock,  his  executors,  administrators  or  assigns. 

For  provisions  as  to  action  at  law  against  delinquent  stock- 
holders, see  section  16,  post.  See  also  section  29,  post,  as  to 
authority  of  stockholders  in  making  assessments  on  stock. 


28  CORPORATION    LAW    OF    DELAWARE. 

A  corporation,  when  formed,  may  enforce  payment  of  the  subscriptions 
to  its  capital  stock  against  persons  who  subscribed  its  articles  of  asso- 
ciation before  the  corporate  body  had  a  legal  existence:  Dorris  v.  French, 
4  Hun,  292;  Buffalo  &  N.  Y.  C.  R.  R.  Co.  v.  Dudley,  14  N.  Y.  336;  Troy 
&  Boston  R.  R.  Co.  v.  Tibbitts,  18  Barb.  297. 

The  vested  right  of  a  holder  of  common  stock  cannot  be  taken  from  him 
without  his  consent:    Hayes  v.  Commonwealth,  82  Penn.  St.  Rep.  518. 

When  stock  is  declared  forfeited,  the  liability  of  the  holder  thereof  to 
the  corporation  for  further  payment  thereon  ceases:  Mills  v.  Stewart.  41 
N.  Y.  389;  Small  v.  Herkimer  Mfg.  Co.,  2  N.  Y.  330. 

The  holding  and  owning  of  a  share  of  common  stock  gives  a  right 
which  cannot  be  divested  without  the  assent  of  the  owner  and  holder,  or 
unless  the  power  so  to  do  has  been  reserved  in  some  way:  Mech.  Bank 
V.  N.  Y.  &  N.  H.  R.  R.  Co.,  13  N.  Y.  599- 

After  a  forfeiture,  the  holder  is  divested  of  his  title  in  the  shares,  which 
is  then  vested  in  the  corporation  and  remaining  stockholders:  Weeks  v. 
Silver  Islet  C.  M.  &  L.  Co.,  54  J.  &  S.  i;  affirmed,  120  N.  Y.  620. 

A  corporation  must  comply  with  all  the  conditions  precedent  to  pay- 
ment on  the  part  of  the  subscribers  before  a  suit  can  be  maintained  upon 
the  subscription.  Where  a  subscriber  agreed  to  pay  in  certain  instalments, 
after  certain  calls,  the  court  held  that  there  could  be  no  recovery  against 
him  without  proof  that  the  calls  had  been  duly  made.  The  rule  in  New 
Jersey  may  be  stated  as  follows:  A  subscriber  is  not  bound  to  pay  for 
his  stock  except  in  the  manner  prescribed  by  statute  or  defined  in  the 
charter,  or  by-laws,  unless  he  waives  these  requirements:  Grosse  Isle 
Hotel  Co.  V.  L' Anson's  Exrs..  42  N.  J.  Law.  10;  affirmed,  43  N.  J.  Law. 
442. 

In  construing  a  similar  section  in  the  railroad  act  the  court  of  errors 
and  appeals  held  that  a  suit  by  the  company  will  not  lie  on  a  subscription 
until  a  call  has  been  duly  made:  Braddock  v.  R.  R.  Co.,  45  N.  J.  Law, 
363.  364;  see  N.  J.  Midland  Ry.  Co.  v.  Strait,  35  N.  J.  Law.  322. 

Where  the  company  has  become  insolvent  and  a  receiver  has  been  ap- 
pointed, the  court  of  chancery  may  direct  the  receiver  to  make  calls: 
Hood  V.  McNaughton,  54  N.  J.  Law,  425;  Barkalow  v.  Totten,  53  N.  J. 
Eq.  573;  Hebbard  v.  Southwestern  Cattle  Co.,  36  Atl.  Rep.  122. 

"A  call  is  nothing  more  than  an  official  declaration  that  the  sums  sub- 
scribed are  required  to  be  paid:"  Braddock  v.  R.  R.  Co.,  45  N.  J.  Law,  363. 

The  unpaid  and  uncalled  subscriptions  for  stock  cannot  be  mortgaged 
or  sold  by  the  corporation.  Where  the  call  has  been  duly  made,  but  not 
collected,  an  assignment  of  the  amount  already  called  is  legal  and  valid: 
Cook  on  Stocks,  etc..  section  iii;  see  N.  J.  Midland  Ry.  Co.  v.  Strait,  35 
N.  J.  Law,  322. 

Where  stock  has  once  been  rightfully  issued,  even  though  nothing  has 
been  paid  on  it  by  the  subscriber,  it  can  only  be  forfeited  in  the  mode 
prescribed  by  the  statute,  and  the  procedure  prescribed  by  the  statute 
must  be  strictly  followed:    Downing  v.  Potts.  23  N.  J.  Law.  66. 

The  remedy  by  forfeiture  is  merely  cumulative,  and  does  not  prevent  an 


CORPORATION    LAW    OF    DELAWARE.  29 

action  for  the  instalments  until  the  forfeiture  is  resorted  to:  Troy  &  Bos- 
ton R.  R.  Co.  V.  Tibbitts,  18  Barb.  297;  Northern  R.  R.  Co.  v.  Miller,  10 
Barb.  260;  O.,  R.  &  C.  R.  R.  Co.  v.  Frost,  21  Barb.  541;  B.  &  N.  Y.  C. 
R.  R.  Co.  V.  Dudley,  14  N.  Y.  336;  Mann  v.  Currie,  2  Barb.  294. 

A  purchaser  of  shares  from  a  stockholder  in  an  existing  corporation 
had  no  interest  in  the  application  of  the  money  paid  therefor,  but  it  is 
different  with  one  who  agrees  to  subscribe  for  shares  in  a  corporation  to 
be  created:   Walker  v.  Anglo-Am.  M.  &  T.  Co.,  72  Hun,  334. 

After  accepting  the  benefits  under  a  plan  adopted  by  its  promoters,  the 
corporation  becomes  subject  to  the  terms  of  the  plan:  Rogers  v.  New 
York  &  Texas  Land  Co.,  134  N.  Y.  197. 

LIABILITY  OF  STOCKHOLDERS. 

Section  14.  When  the  whole  capital  stock  of  a  corporation 
shall  not  have  been  paid  in,  and  the  assets  shall  be  insufficient 
to  satisfy  the  claims  of  its  creditors,  each  stockholder  shall  be 
bound  to  pay  on  each  share  held  by  him  the  sum  necessary 
to  complete  the  amount  of  the  par  value  of  such  share  as  fixed 
by  the  charter  of  the  company,  or  its  certificate  of  incorpora- 
tion, or  such  proportion  of  that  sum  as  shall  be  required  to 
satisfy  the  debts  of  the  company,  which  said  sum  or  propor- 
tion thereof  may  be  recovered  as  provided  for  in  section  44  of 
this  act.     See  notes  to  section  7,  subd.  10. 

In  New  York  it  is  held  that  if  a  stockholder  contemplating  the  insol- 
vency of  a  corporation,  in  case  his  stock  has  not  been  fully  paid  for,  as- 
signs his  shares  to  an  irresponsible  person  to  escape  liability,  he  remains 
liable  to  the  then  creditors  of  the  corporation:  Sinclair  v.  Dwight,  9  App. 
Div.  297. 

For  provisions  requiring  a  creditor  to  exhaust  his  remedy 
against  corporate  property  before  selling  a  stockholder's 
private  property,  see  section  46,  post. 

Section  31,  post,  provides  for  certifying  to  the  secretary  of 
state  the  payment  of  instalments  on  capital  stock. 

LIEN  OF  CORPORATION  ON  ITS  CAPITAL  STOCK. 

Section  15.  No  corporation  shall  take  as  security  for  any 
debts  a  lien  upon  any  part  of  its  capital  stock,  or  be  the  holder 
or  purchaser  of  any  part  thereof,  unless  such  lien  or  purchase 


30  CORPORATION    LAW    OF    DELAWARE. 

shall  be  necessary  to  prevent  loss  upon  a  debt  previously  con- 
tracted. 

It  is  probable  that  the  debts  for  which  a  corporation  can 
take  its  own  stock  do  not  include  assessments  on  the  stock 
itself,  but  only  such  debts  as  are  contracted  in  the  ordinary 
course  of  business,  nevertheless  a  corporation  may  have  its 
own  stock  forfeited  to  it  for  the  non-payment  of  assessments 
under  the  conditions  fully  set  out  in  section  13. 

Quaere. — Who  is  to  judge  of  the  necessity  for  a  corporation 
taking  its  own  stock  to  escape  loss  upon  a  debt  previously 
contracted?  Must  the  corporation  sue  the  debtor  and  have 
an  execution  returned  unsatisfied  in  order  to  establish  such 
necessity?  Or  is  the  corporation  itself  to  decide  this  ques- 
tion? 

At  common  law  no  such  lien  existed:  Cook  on  Corpora- 
tions, section  520. 

When  a  lien  is  expressly  given  by  its  charter  or  by  statute  all  persons 
dealing  with  the  corporation  are  affected  by  it  and  must  take  notice  of  it: 
Cook  on  Corp.,  section  523,  and  cases  cited. 

There  is  at  common  law  nothing  to  prevent  a  corporation  from  taking 
its  own  stock  in  payment  or  satisfaction  of  debts,  and  some  cases  hold 
that  at  common  law  a  corporation  may  purchase  its  own  stock,  provided 
the  purchase  is  bona  fide  and  not  in  fraud  of  creditors:  Verplanck  v.  Mer- 
cantile Ins.  Co.,  I  Edw.  Ch.  83;  Iowa  Lumber  Co.  v.  Foster,  49  Iowa,  25: 
Barton  v.  Port  Jackson,  etc.,  Co.,  17  Barb.  397;  Cooper  v.  Frederick.  9 
Ala.  738;  Gillet  v.  Moody,  3  N.  Y.  479;  Taylor  v.  Miami  Exporting  Co.. 
6  Ohio,  176;  Ohio  State  Bank  v.  Fox,  3  Blatch.  431;  Columbus  Bank  v. 
Bruce,  17  N.  Y.  507. 

Morawetz  on  Corporations,  section  115,  says: 

"The  general  rule  is  that  the  corporation  may  receive  shares  in  the 
company  by  way  of  gift  or  bequest,  or  in  satisfaction  of  debts  due  the 
company  which  cannot  be  collected  in  any  other  manner.  Where  the 
company  takes  its  own  shares  they  are  said  not  to  be  merged,  but  to  be 
capable  of  reissue  by  the  corporation.  Under  these  circumstances,  it  is 
said,  the  shares  do  not  become  merged,  but  remain  temporarily  in  abey- 
ance, and  may  be  sold  again  by  the  corporation.  As  a  matter  of  fact,  how- 
ever, the  shares  are  extinguished,  and  new  shares  are  subsequently  created 
in  their  place.  By  a  fiction,  these  new  shares  are  considered  in  all  re- 
spects as  if  they  were  the  old  shares  and  the  corporation  merely  an  in- 
termediary transferee;  but  it  would  be  an  absurdity  to  say  that  a  corpora- 
lion  can  really  hold  shares  in  itself."  See  Clark  on  Corporations,  p.  153: 
.State  V.  Smith,  48  Vermont,  266:  Chicago,  etc.,  Ry.  Co.  v.  Town  of  Mar- 
seilles, 54  111.  145. 


CORPORATION    LAW    OF    DELAWARE.  3I 

Stock  belonging  to  the  corporation  sliall  not  be  voted  upon  directly  or 
indirectly:    Section  24,  post. 

STOCK  PERSONAL  PROPERTY. 

Section  i6.  The  shares  of  stock  shall  be  deemed  personal 
property  and  transferable  on  the  books  of  the  company  in 
the  manner  provided  by  the  by-laws,  and  subscriptions  there- 
for shall  be  made  payable  to  the  corporation,  and  shall  be 
payable  in  such  instalments  and  at  such  time  or  times  as  shall 
be  determined  by  the  directors  or  managers,  and  an  action  at 
law  may  be  maintained  in  the  name  of  the  corporation  to  re- 
cover any  portion  of  an  instalment  which  shall  remain  due 
and  unpaid  for  the  period  of  twenty  days  after  the  application 
of  the  money  which  may  arise  from  the  proceeds  of  the  sale 
of  the  delinquent  shares  of  stock  as  herein  provided;  and 
whenever  transfer  of  shares  shall  be  made  for  collateral  se- 
curity, and  not  absolutely,  the  same  shall  be  so  expressed  in 
the  entry  of  the  said  transfer. 

For  other  remedies  against  delinquent  stockholders  see  sec- 
tion 13,  ante. 

The  provisions  of  charters  and  by-laws,  under  the  statute  that  stock 
of  the  corporation  shall  be  transferable  only  on  the  books  of  the  company, 
are  intended  for  the  protection  of  the  company:  Matthews  v.  Hoagland, 
48  N.  J.  Eq.  455,  486. 

"A  certificate  of  stock  accompanied  by  an  irrevocable  power  of  attorney, 
either  filled  up  or  in  blank,  is,  in  the  hands  of  a  third  party,  presumptive 
evidence  of  ownership  in  the  holder.  And  where  the  party  in  whose  hands 
the  certificate  is  found  is  a  holder  for  value,  without  notice  of  any  inter- 
vening equity,  his  title  cannot  be  impeached.  The  holder  of  the  certificate 
may  fill  up  the  letter  of  attorney,  execute  the  power,  and  thus  obtain  the 
legal  title  to  the  stock,  and  such  a  power  is  not  limited  to  the  person  to 
whom  it  was  first  delivered,  but  enures  to  each  bona  fide  holder  into  whose 
hands  the  certificate  and  power  may  pass:"  Prall  v.  Tilt,  28  N.  J.  Eq.  479, 
483;  Rogers  v.  N.  J.  Ins.  Co..  g  N.  J.  Law.  167;  Broadway  Bank  v. 
McElrath,  13  N.  J.  Eq.  26;  Hunterdon  County  Bank  v.  Nassau  Bank,  17 
N.  J.  Eq.  496;  Mt.  Holly  Turnpike  Co.  v.  Ferree.  17  N.  J.  Eq.  117;  Del. 
&  Atl.  R.  R.  Co.  V.  Irick,  23  N.  J.  Law,  321;  State,  Bush  v.  Warren  F. 
Co.,  32  N.  J.  Law,  439. 

The  reason  of  the  rule  is  stated  in  Matthews  v.  Hoagland,  48  N.  J.  Eq. 
435,  to  be  "that  the  record  owner  has  done  everything  in  his  power  to 


o- 


CORPORATION    LAW    OF    DELAWARE. 


effect  the  transfer,  and  by  such  act  has  assigned  all  interest  he  may  have 
had  and  surrendered  all  indicia  of  ownership.  As  to  third  parties,  holders 
for  value,  he  is  estopped  from  asserting  ownership — as  to  volunteers,  the 
gift  is  complete  and  irrevocable,  if  inter  vivos:"  lb.,  p.  490;  see  Walker 
V.  Dixon  Crucible  Co.,  47  N.  J.  Eq.  342. 

An  agreement  between  the  stockholders  of  a  corporation  that  no  one 
of  them  will  sell,  assign  or  dispose  of  his  stock,  without  having  first  givea 
the  other  parties  an  opportunity  to  purchase,  does  not  preclude  a  party 
from  transferring  a  legal  title  to  his  stock  without  the  consent  of  the 
others,  and  in  violation  of  the  agreement,  and  this  although  the  transferee 
was  cognizant  of  the  agreement,  at  the  time  of  the  transfer:  Argus  Co. 
V.  Manning,  138  N.  Y.  557. 

A  provision  on  the  face  of  a  certificate  of  stock  that  the  shares  therein 
referred  to  are  held  "subject  to  the  conditions  and  stipulations  contained 
in  the  articles  of  association  above  mentioned,"  is  sufficient  notice  to  put 
a  purchaser  of  the  shares  upon  inquiry  to  ascertain  what  the  conditions 
and  stipulations  are:    Gibbs  t'.  Long  Island  Bank.  83  Hun,  92. 

A  certificate  of  stock,  accompanied  by  an  irrevocable  power  of  attorney,^ 
either  filled  up  or  in  blank,  is,  in  the  hands  of  a  third  party,  presumptive 
evidence  of  ownership  in  the  holder;  and  the  title  of  a  holder  for  value, 
without  notice  of  intervening  equity,  cannot  be  impeached.  Each  bona 
fide  holder,  to  whom  the  certificate  is  delivered,  has  power  to  fill  up  the 
certificate  and  thus  obtain  title:  Prall  v.  Tilt,  i  Stew.  Eq.  479.  A  volun- 
tary transfer  of  stock  perfected  by  delivery  and  acceptance  becomes  an 
executed  contract,  and  is  irrevocable  by  the  owner:  Walker  v.  Dixon 
Crucible  Co.,  47  N.  J.  Eq.  342. 

The  relation  of  stockholder  is  established  by  the  subscriptions  and  pay- 
ment, and  does  not  depend  upon  the  issue  of  a  certificate  or  other  evidence 
of  such  right  by  the  corporation:    Rutter  v.  Kilpatrick,  63  N.  Y.  604. 

Even  where  the  charter  provides  that  shares  are  to  be  transferable  upon 
the  books  of  the  corporation,  the  same  may  be  effectually  transferred  as 
collateral  security  for  debt,  as  against  a  creditor  of  the  bailor  bj"^  a  de- 
livery of  the  certificate  with  a  blank  irrevocable  power  of  attorney  to  trans- 
fer: Broadway  Bank  z'.  McElrath,  2  Beas.  24.  Equity  will  compel  the 
transfer  of  shares  to  the  equitable  owner  thereof  and  will  restrain  those 
fraudulently  refusing  to  transfer  stock  from  voting  the  stock  to  the  preju- 
dice of  the  real  owners:    Archer  i'.  Am.  Water  Works  Co..  50  N.  J.  Eq.  S3- 

A  stockholder  may  proceed  against  a  corporation  if  it  negligently  can- 
cels his  stock  and  issues  certificates  therefor  to  another:  St.  Romes  v. 
Levee  Cotton  Co.,  127  U.  S.  614. 

It  should  be  noted  that  the  personal  remedy  against  delin- 
quent stockholders  is  deferred  until  twenty  days  after  the  ap- 
plication of  the  proceeds  of  the  sale  of  the  delinquent  shares 
of  stock.  The  corporation  must  first  proceed  against  the 
stock  itself  for  unpaid  assessments,  and  can  hold  the  stock- 


CORPORATION    LAW    OF    DELAWARE.  ^^ 

holder  personally  liable  only  for  the  balance  remaining  due 
after  the  sale  of  the  stock. 

A  purchaser  of  stock  need  only  look  to  the  title  of  his  vendor  on  the 
books  of  the  company,  and  is  not  afifected  by  previous  irregularity  in  the 
transfer:   W.  &  Phila.  Turnpike  Co.  v.  Bush,  i  Harr.  44. 

A  subscription  to  a  common  object  with  others,  though  gratuitous,  cre- 
ates a  legal  liability. 

If  on  a  condition,  the  condition  must  be  performed  before  a  right  of 
action  accrues:    Norton  v.  Janvier,  5  Harr.  346. 

Persons  engaged  in  organizing  a  corporation,  who  induce  others  to 
subscribe  for  stock,  by  issuing  statements  and  prospectuses,  are  liable  for 
damages  if  they  make  material  misrepresentations,  or  conceal  material 
facts,  to  the  injury  of  those  whom  they  induce  to  subscribe,  and  this  lia- 
bility extends  to  all  those  who  are  induced  by  their  agents  to  subscribe 
for  shares:  Walker  v.  Anglo-Am.  M.  &  T.  Co.,  72  Hun,  334;  Brewster 
V.  Hatch,  122  N.  Y.  349;  Morgan  v.  Skiddy,  62  N.  Y.  319;  Getty  v.  Devlin, 
54  N.  Y.  403;  70  N.  Y.  504. 

VOTING.     LIST   OF  STOCKHOLDEBS. 

Section  17.  After  the  first  election  of  directors  no  stock 
shall  be  voted  on  at  any  election  which  shall  have  been  trans- 
ferred on  the  books  of  the  company  within  twenty  days  next 
preceding  such  election,  and  it  shall  be  the  duty  of  the  of^cer 
who  shall  have  charge  of  the  transfer  books  to  prepare  and 
make,  at  least  ten  days  before  every  election,  a  complete  list 
of  stockholders  entitled  to  vote,  arranged  in  alphabetical 
order.  Such  list  shall  be  open  at  the  principal  office  or  place 
of  business  for  said  ten  days,  to  the  examination  of  any  stock- 
holder, and  shall  be  produced  and  kept  at  the  time  and  place 
of  election  during  the  whole  time  thereof,  and  subject  to  the 
inspection  of  any  stockholder  who  may  be  present.  Upon 
the  neglect  or  refusal  of  the  said  directors  to  produce  such 
list  at  any  election  they  shall  be  ineligible  to  any  office  at  such 
election.  The  stock  ledger,  or  if  there  be  none,  then  the 
transfer  books  of  the  company,  shall  be  the  only  evidence  as 
to  who  are  the  stockholders  entitled  to  examine  such  list  or 
the  books  of  the  company  or  to  vote,  in  person  or  by  proxy, 
at  any  election.  The  original  or  duplicate  books  of  any  cor- 
poration organized  under  this  act,  in  which  the  transfers  of 
3 


34  CORPORATION    LAW    OF    DELAWARE. 

Stock  shall  be  registered,  and  the  original  or  duplicate  books 
containing  the  names  and  addresses  of  the  stockholders,  and 
the  number  of  shares  held  by  them,  respectively,  shall,  at  all 
times,  during  the  usual  hours  for  business,  be  open  to  the  ex- 
amination of  every  stockholder  at  its  principal  office  or  place 
of  business  in  this  state,  and  said  original  or  duplicate  books 
shall  be  evidence  in  all  courts  of  this  state. 

In  regard  to  the  requirements  of  voting  this  section  is  practically  the 
same  as  17  Del.  Laws,  chapter  147,  section  22. 

Corporation  books  are  evidence  in  a  suit  between  the  company  and  a 
corporator. 

A  member  of  the  company  is  not  a  competent  general  witness  for  the 
plaintiff  in  such  suit:   Jefferson  v.  Stewart,  4  Harr.  82. 

Plaintiff's  book  in  which  the  minutes  of  its  proceedings  are  kept  and 
also  containing  a  copy  of  its  by-laws  which  were  adopted  on  the  report 
of  a  committee  of  the  directors,  admitted  in  evidence,  though  objected 
to  as  not  being  the  original  report  of  said  committee:  Beeber  v.  Walton, 
Whann  &  Co.,  7  Houst.  471. 

"Entries  in  the  books  of  a  corporation  are,  as  a  general  rule,  competent 
evidence  of  the  proceedings  of  the  corporation  and  of  the  acts  and  votes 
of  its  officers  transacted  at  ofificial  meetings:  but  such  entries  are  not  notice 
to  third  persons  of  the  acts  or  resolutions  entered  upon  its  minutes.  As 
to  third  persons,  the  books  of  a  corporation  are  private  books,  and  such 
persons  are  not  chargeable  with  knowledge  of  matters  there  recorded  any 
more  than  a  third  person  would  be  chargeable  with  knowledge  of  entries 
made  against  him  in  the  books  of  a  private  person:"  Wetherbee  v.  Baker, 

35  N.  J.  Eq.  501,  509,  510;  North  River  Meadow  Co.  v.  Christ  Church, 
22  N.  J.  Law,  424:  and  see  Van  Hook  v.  Summerville  Mfg.  Co..  5  N.  J. 
Eq.  137. 

It  will  be  noted  that  no  stock  can  be  voted  on  which  shall 
have  been  transferred  on  the  books  of  the  company  within 
twenty  days  next  preceding  such  election,  and  that  a  complete 
list  of  the  stockholders  entitled  to  vote  shall  be  prepared  at 
least  ten  days  before  every  election. 

In  the  matter  of  the  petition  of  Vernon,  et  al.,  t  Penn.  202,  it  was  held 
that  under  17  Del.  Laws,  chapter  147,  section  22,  an  election  for  directors 
of  a  corporation  at  which  four  shares  of  stock  were  voted,  which  were 
transferred  to  the  voters  on  the  day  of  the  election,  was  void. 

Notice  must  be  served  on  the  corporation  of  an  application  to  set  aside 
its  election  of  directors:    lb. 

The  list  of  stockholders  does  not  "operate  as  a  registry  of  voters.  The 
right  of  the  stockholder  to  vote  does  not  depend  upon  his  name  being 


CORPORATION    LAW    OF    DELAWARE.  35 

contained  in  the  list;  on  the  contrary,  the  statute  expressly  declares  that 
the  books  of  the  corporation  shall  be  the  only  evidence  who  are  the 
stockholders  entitled  to  vote:"    Downing  v.  Potts,  23  N.  J.  Law,  66-76. 

No  stockholder  is  bound  to  vote  for  a  larger  number  of  persons  than 
he  chooses:    Vandenburgh  v.  Broadway  Ry.  Co.,  29  Hun,  356. 

If  votes  erroneously  rejected  would,  if  received,  have  elected  a  certain 
ticket,  the  election  will  be  set  aside:  In  re  L.  I.  R.  R.  Co.,  19  Wend,  yj; 
ex  parte  Murphy,  7  Cow.  153. 

The  power  of  attorney  need  not  be  in  any  prescribed  form,  nor  be  ex- 
ecuted with  any  particular  formality.  It  is  sufficient  if  it  appear  on  its 
face  to  confer  the  requisite  authority,  and  that  it  be  free  from  all  reason- 
able grounds  of  suspicion  of  its  genuineness  and  authenticity:  In  re  Elec- 
tion of  St.  Lawrence  Steamboat  Co.,  44  N.  J.  Law,  529. 

A  proxy  need  not  be  a  stockholder:  In  re  Lighthall  Mfg.  Co.,  47 
Hun,  258. 

Stock  held  by  the  company  itself  cannot  be  voted  on  (sec- 
tion 24,  post). 

Stock  held  by  executor  or  trustee  can  be  voted  on  (sec- 
tion 2;^). 

Hypothecated  stock  can  be  voted  on  unless  pledgee  has 
express  power  to  vote  (section  23). 

Every  corporation  shall  maintain  a  principal  office  in  this 
state  and  have  an  agent  resident  of  this  state  in  charge  thereof, 
wherein  shall  be  kept  the  original  or  duplicate  stock  and 
transfer  books  of  the  corporation ;  in  other  words,  a  Delaware 
corporation  must  dwell  in  the  place  of  its  creation,  and  main- 
tainiiig  a  principal  office  gives  the  corporate  tree  a  root-hold 
in  Delaware  soil. 

This  is  the  legislative  prohibition  against  "tramp"  corpo- 
rations. 

The  statute  requires  that  the  principal  office  shall  be  a  place 
of  business  existing  in  fact,  open  during  the  usual  hours  of 
business  and  accessible  to  the  public. 

The  agent  ought  to  be  an  adult  resident  of  Delaware  or  a 
Delaware  corporation  empowered  by  its  charter  to  act  as 
such  agent. 

It  is  well  here  to  call  attention  to  the  serious  consequences 
of  a  failure  to  iiiaiutain  a  principal  oifice  in  this  state. 

The  supreme  court  of  Minnesota  has  held  in  a  late  case  as  follows: 
"Words  need  not  be  wasted  in  demonstrating  that  for  the  past  three 
years  the  stockholders  and  officers  of  the  corporation  have  been  engaged 
in  evading  and  violating  that  section  of  the  statute  under  which  the  cor- 
poration was  organized,  which  rec|uires  that  the  place  of  business  and  their 


36  CORPORATION    LAW    OF    DELAWARE. 

books  be  kept  in  this  state.  This  is  an  abuse  and  misuser  of  its  corporate 
rights,  powers  and  franchises  which  justify  and  demand  a  forfeiture  there- 
of:" State  ex  rel.  v.  Park  &  Nelson  Lumber  Co.,  i  Am.  and  Eng.  Corp. 
Cases  (N.  S.),  pp.  24,  26. 

It  lias  been  repeatedly  held  in  many  states  that  such  failure 
makes  the  members  of  the  corporation  liable  as  partners  for 
debts  contracted  by  the  corporation. 

See  Hill  v.  Beach.  12  N.  J.  Eq.  31;  Booth  v.  Wonderly,  36  N.  J.  Law, 
250;  Kruse  t'.  Dusenbury,  i  City  Court  Sup.  87;  Montgomery  v.  Forbes, 
148  Mass.  249;  Thompson  on  Corporations.  Vol.  6,  section  7895,  p.  6273. 

Contra. — Demarest  v.  Flack,  128  N.  Y.  205;  Lancaster  v.  A.  I.  Co.,  140 
N.  Y.  576;  Cook  on  Stocks,  etc.,  p.  319;  Stout  v.  Zulick,  48  N.  J.  Law.  599. 

This  statute  differs  in  an  important  particular  from  the  New 
Jersey  statute  in  that  either  the  original  or  duplicate  stock  and 
transfer  books  must  be  kept  in  the  principal  ofifice  in  Dela- 
ware ;  the  New  Jersey  act,  on  the  contrary,  requires  the 
original  books  to  be  kept  in  New  Jersey. 

Delaware's  liberality  in  this  respect  will  doubtless  be  of 
great  convenience  to  those  corporations  whose  business  is 
largely  conducted  in  other  states. 

For  the  purpose  of  avoiding  litigations  by  stockholders 
having  but  a  small  interest  in  the  company,  and  more  espe- 
cially to  prevent  rival  concerns  from  prying  into  the  private 
accounts  and  business  of  the  company  by  purchasing  a  few 
shares  of  stock,  it  is  common  to  insert  in  the  certificate  of  in- 
corporation, as  a  limitation  upon  the  powers  of  the  stock- 
holders (see  section  8)  a  clause  substantially  as  follows: 

"The  directors  shall  from  time  to  time  determine  whether 
and  to  what  extent,  and  at  what  times  and  places  and  under 
what  conditions  and  regulations,  the  accounts  and  books  of 
the  corporation,  or  any  of  them,  shall  be  open  to  the  inspec- 
tion of  the  stockholders ;  and  no  stockholder  shall  have  any 
right  of  inspecting  any  account  or  book  or  document  of  the 
corporation  except  as  conferred  by  statute  or  authorized  by 
the  directors,  or  by  a  resolution  of  the  stockholders." 

The  statute  gives  each  stockholder  the  express  right  to  ex- 
amine the  stock  and  transfer  books  at  the  company's  principal 
office  at  all  times  during  business  hours,  and  if  that  right  is 
denied  to  him  it  would  seem  that  he  has  a  clear  remedy  by 
mandamus. 


CORPORATION    LAW    OF    DELAWARE.  37 

A  refusal  to  allow  a  stockholder's  authorized  attorney  to  examine  the 
books  was  a  denial  of  the  stockholder's  rights:  Mitchell  v.  Rubber  Re- 
claiming Company,  24  Atl.  Rep.  407. 

A  stockholder  in  a  private  corporation  has  such  an  interest  in  it  and 
its  affairs  as  will  entitle  him  to  an  inspection  and  copies  of  its  books, 
papers  and  accounts  on  reasonable  and  proper  occasion,  and  when  they 
become  material  to  him  as  evidence  in  a  suit  with  another.  When  this  right 
is  denied  him  by  the  company,  or  any  of  its  agents  having  the  custody  of 
said  books,  there  being  no  other  specific  remedy,  a  writ  of  mandamus  will 
issue  to  enforce  the  same. 

A  foreign  corporation,  holding  property  and  doing  business  within  this 
state,  is  considered  and  treated  as  a  domestic  corporation,  having  the 
same  rights  and  protection  in  the  carrying  on  of  its  business  and  enforce- 
ment of  its  contracts,  and  being  subject  to  the  same  duties  and  answerable 
to  the  same  tribunals  and  in  a  similar  manner,  as  domestic  corporations. 

A  non-resident  stockholder  of  a  foreign  corporation,  said  corporation 
owning  property  and  doing  business  in  this  state,  has  a  right  to  inspect 
and  make  copies  of  the  books  of  said  corporation  for  use  in  a  suit  in  an- 
other state,  they  being  in  the  custody  of  its  president  residing  in  this  state, 
and  is  entitled  to  a  writ  of  mandamus  for  the  enforcement  of  said  right 
against  said  president,  he  being  within  the  jurisdiction  of  this  court: 
Richardson  z'.  Swift,  7  Houst.  137. 

DIVIDENDS. 

Section  i8.  No  corporation  created  under  the  provisions 
of  this  act.  nor  the  directors  thereof,  shall  make  dividends  ex- 
cept from  the  surplus  or  net  profits  arising  from  its  business, 
nor  divide,  withdraw,  or  in  any  way  pay  to  the  stockholders, 
or  any  of  them,  any  part  of  its  capital  stock,  or  reduce  its 
capital  stock,  except  according  to  this  act,  and  in  case  of  any 
violation  of  the  provisions  of  this  section,  the  directors  under 
whose  administration  the  same  may  happen  shall  be  jointly 
and  severally  liable  in  an  action  on  the  case  at  any  time  within 
six  years  after  paying  such  dividend  to  the  corporation  and 
to  its  creditors  or  any  of  them  in  the  event  of  its  dissolution 
or  insolvency,  to  the  full  amount  of  the  dividend  made  or  cap- 
ital stock  so  divided,  withdrawn,  paid  out,  or  reduced,  with 
interest  on  the  same  from  the  time  such  liability  accrued ;  pro- 
vided, that  any  director  who  may  have  been  absent  when  the 
same  was  done,  or  who  may  have  dissented  from  the  act  or 
resolution  by  which  the  same  was  done,  may  exonerate  him- 


^S  CORPORATION    LAW    OF    DELAWARE. 

self  from  such  liability  by  causing  his  dissent  to  be  entered  at 
large  on  the  books  containing  the  minutes  of  the  proceedings 
of  the  directors,  at  the  time  the  same  was  done,  or  forthwith 
after  he  shall  have  notice  of  the  same,  and  by  causing  a  true 
copy  of  said  dissent  to  be  published,  within  two  weeks  after 
the  same  shall  have  been  so  entered,  in  a  newspaper  published 
in  the  county  where  the  corporation  has  its  principal  office. 
See  also  section  137,  post,  and  notes. 

Directors  of  a  corporation  have  no  right  to  pay  dividends  unless  thej' 
leave  the  capital  stock  unimpaired :  Berwind-White  Coal  Mining  Co.  v. 
Ewart,  II  Misc.  R.  490. 

This  section  is  intended  to  prevent  the  division,  distribution,  with- 
drawal and  reduction  of  the  property  of  a  corporation  below  the  sum 
limited  in  its  charter:  Williams  t'.  W.  U.  T.  Co.,  93  N.  Y.  187;  Rorke  v. 
Thomas,  56  N.  Y.  559. 

It  would  also  appear  that  stockholders  are  liable  to  creditors  for  divi- 
dends paid  out  of  the  capital  stock,  thus  in  Williams  v.  Boyce,  38  N.  J. 
Eq.  364,  it  was  held  that  an  express  statutory  provision,  holding  corpora- 
tion directors  personally  responsible  for  dividends  paid  out  of  the  capital 
instead  of  the  profits,  does  not  exonerate  the  stockholders  for  liability 
to  repay  such  dividends  for  the  benefit  of  the  creditors  of  the  corporation. 
"It  is  undeniably  true,  as  a  general  proposition,  that  stockholders  are  liable 
in  equity  to  repay,  for  the  benefit  of  the  creditors  of  the  corporation, 
money  which  has  been  paid  to  them  out  of  the  capital  stock.  This  is  not 
based  on  any  statute,  but  upon  the  equitable  ground  that  the  stock  is  re- 
garded as  a  trust  fund  for  all  the  debts  of  the  corporation,  and  no  stock- 
holder can  entitle  himself  to  any  dividend  or  share  of  it  until  all  the  debts 
are  paid.     And  the  remedy  is  in  equity  and  not  at  law." 

Dividends  are  payable  to  the  person  in  whose  name  the  stock  stands 
on  the  books  of  the  corporation  or  its  legal  representatives.  Officers  of 
a  corporation  are  not  required  to  demand  production  of  the  certificate  of 
stock  before  paying  dividends  thereon:  Brisbane  v.  D.  L.  &  W.  R.  R.  Co., 
94  N.  Y.  204;  Jermain  v.  L.  S.  &  M.  S.  Ry.  Co.,  91  N.  Y.  483;  Boadman 
V.  Same,  84  N.  Y.  157. 

When  a  dividend  is  declared  it  becomes  a  debt  due  from  the  corpora- 
tion to  the  individual  stockholder,  and  after  demand  of  payment,  an  action 
at  law  may  be  maintained  for  its  recovery:  King  v.  Paterson  &  H.  R.  R. 
R.  Co.,  29  N.  J.  Law,  504. 

FALSE  STATEMENT. 

Section  19.  If  the  directors  or  ofificers  of  any  corporation 
organized  under  the  provisions  of  this  act,  shall  knowingly 
cause  to  be  published  or  given  out  any  written  statement  or 


CORPORATION    LAW    OF    DELAWARE.  39 

report  of  the  condition  or  business  of  the  corporation  that  is 
false  in  any  material  respect,  the  officers  and  directors  causing 
such  report  or  statement  to  be  published  or  given  out,  or  as- 
senting thereto,  shall  be  jointly  and  severally,  individually  lia- 
ble for  any  loss  or  damage  resulting  therefrom. 

This  section  applies  to  "directors  or  officers,"  and  does  not  include 
incorporators  who  signed  the  certificate  of  organizati2on:  Thomson- 
Houston  Elec.  Co.  V.  Murray,  2)7  Atl.  Rep.  443. 

Quaere. — Would  not  this  section  make  directors  and 
officers  liable  to  the  corporation  itself  or  its  stockholders  for  any 
loss  or  damao:e  resulting:  from  such  false  statement? 


NUMBER  OF  DIRECTORS  AND  HOW  ELECTED. 

Section  20.  The  business  of  every  corporation  organized 
under  the  provisions  of  this  act,  shall  be  managed  by  a  board 
of  not  less  than  three  directors,  except  as  hereinafter  pro- 
vided, each  of  whom  shall  own  in  his  own  right  not  less  than 
three  shares  of  capital  stock ;  they  shall  hold  office  until  their 
successors  are  respectively  elected  and  qualified,  and  a  ma- 
jority of  them  shall  constitute  a  quorum  for  the  transaction 
of  business,  and  at  least  one  of  whom  shall  be  a  resident  of  this 
state.  All  elections  for  directors  shall  be  by  ballot,  and  shall 
be  held  in  this  state  unless  the  by-laws  otherwise  provide ;  and 
in  the  first  instance,  the  directors  shall  be  elected  at  a  meeting 
held  before  the  corporation  is  authorized  to  commence  busi- 
ness, and  thereafter  at  an  annual  meeting  of  the  stockholders 
to  be  held  on  the  day  and  at  the  place  named  in  the  by-laws, 
and  which  shall  not  be  changed  within  sixty  days  next  before 
the  day  on  which  the  election  is  to  be  held,  and  notice  of  any 
change  shall  be  given  to  each  stockholder  twenty  days  before 
the  election  is  held;  and  if,  for  any  cause,  an  election  is  not 
held  on  the  day  named  in  the  by-laws,  a  special  meeting  for 
that  purpose  shall  be  called  within  thirty  days  thereafter,  of 
which  due  notice  shall  be  given  by  the  secretary  to  each  stock- 
holder, in  person  or  by  letter  mailed  to  his  last  known  address. 


40  CORPORATION    LAW    OF    DELAWARE. 

A  Stockholder  shall  be  entitled  to  one  vote  for  each'  share 
of  stock  he  may  hold  and  may  vote  at  any  meeting  by  proxy, 
in  writing,  signed  by  him,  and  attested  in  such  manner  as  the 
by-laws  may  prescribe;  and  a  vacancy  in  the  board  of  direc- 
tors shall  be  filled  by  the  board,  and  the  directors  so  appointed 
shall  hold  office  until  the  next  annual  election  and  until  their 
successors  shall  be  duly  elected  and  qualified. 

The  directors  of  any  corporation  organized  as  aforesaid, 
may,  by  a  vote  of  the  stockholders,  be  divided  into  one.  two 
or  three  classes,  the  term  of  office  of  those  of  the  first  class  to 
expire  at  the  annual  meeting  next  ensuing,  of  the  second  class 
one  year  thereafter,  of  the  third  class  two  years  thereafter ;  and 
at  each  annual  election  held  after  such  classification,  directors 
shall  be  chosen  for  a  full  term,  as  the  case  may  be,  to  succeed 
those  whose  terms  expire. 

The  stockholders,  as  such,  have  no  power  to  make  any  contract  or  ex- 
ecute any  work.  Their  power  is  confined  to  electing  directors  and  ad- 
vising them  in  their  conduct  of  the  business  of  the  company:  Loewenthal 
V.  Rubber  Reclaiming  Co.,  52  N.  J.  Eq.  445. 

While  it  is  the  duty  of  courts  to  protect  corporations  from  unauthorized 
acts  of  its  officers,  yet  when  directors  permit  its  officers  to  hold  them- 
selves out  as  clothed  with  full  power  to  manage  all  its  affairs  for  a  long 
time,  and  thus  lead  innocent  persons  to  contract  with  them,  they  cannot 
repudiate  such  contracts  by  invoking  a  by-law  which  they  had  allowed 
to  fall  into  disuse:  Parmelee  v.  Associated  Physicians  &  Surgeons,  11 
Misc.  R.  363. 

The  board  of  directors  must  act  as  a  board.  A  single  director  has  no 
power  merely  by  virtue  of  his  office.  For  any  power  he  undertakes  to 
exercise  he  must  get  authority  from  the  board:  Titus  v.  Cairo  &  Fulton 
R.  R.  Co.,  37  N.  J.  Law,  98. 

No  director  can  vote  at  a  meeting  of  the  board  of  directors  by  proxy: 
The  Craig  Med.  Co.  v.  The  Merchants'  Bank  of  Rochester,  59  Hun,  561. 

He  can  loan  money  to  it  and  become  its  creditor,  and  he  can  receive 
by  the  act  of  the  corporation  security  for  his  debt:    lb.,  395. 

He  may  foreclose  a  mortgage  against  the  corporation,  and  may  protect 
himself  by  bidding  at  the  sale:    lb.,  395. 

A  majority  of  the  directors  of  a  corporation  is  a  quorum,  and  a  majority 
of  such  quorum  when  convened  can  do  any  act  within  the  power  of  the 
directors:  Wells  z:  Rahway  White  Rubber  Co.,  19  N.  J.  Eq.  402;  Barnert 
V.  Paterson,  48  N.  J.  Law,  400;  Met.  Tel.  Co.  f.  Dom.  Tel.  Co.,  44  N.  J. 
Eq.  573;  Cadmus  v.  Farr,  47  N.  J.  Law,  208. 

Directors  may  select  an  executive  committee  and  give  it  power  to  trans- 


CORPORATION    LAW    OF    DELAWARE.  4I 

act  the  business  of  the  company  during  intervals  between  meetings  of  the 
board  and  such  committee  may  delegate  one  of  its  number  to  do  minis- 
terial acts,  indorsing  checks,  etc.:  Sheridan  El.  Lt.  Co.  v.  Chat.  N.  Bk., 
127  N.  Y.  S17. 

Beyond  the  powers  conferred  upon  them  by  the  charter  and  the  powers 
of  the  corporation  itself  the  directors  cannot  go.  Within  that  scope  their 
discretion  is  controlling,  and  a  court  of  equity  will  not  interfere  at  the 
instance  of  dissatisfied  stockholders  with  the  exercise  of  their  judgment. 
But  while  they  have  these  broad  powers  they  must  exercise  them  for  the 
benefit  of  the  company,  and  not  for  their  own  benefit.  They  are  trustees 
for  the  stockholders,  and  being  trustees  they  can  make  no  binding  con- 
tracts with  the  company.  An  express  contract  between  a  director  and  the 
corporation  is  not  void,  but  voidable,  to  be  avoided  at  the  option  of  the 
cestui  que  trust,  exercised  within  a  reasonable  time.  It  matters  not 
whether  the  contract  be  fair  and  honest  and  to  the  advantage  of  the  com- 
pany. Said  Mr.  Justice  Dixon,  in  the  case  of  Stewart  v.  Lehigh  Valley 
R.  R.  Co.,  z^  N.  J.  Law,  505,  at  p.  522:  "The  vice  which  inheres  in  the 
judgment  of  a  judge  in  his  own  cause  contaminates  the  contract;  the  mind 
of  the  director  or  trustee  is  the  forum  in  which  he  and  his  cestui  que  trust 
are  urging  their  rival  claims,  and  when  his  opposing  litigant  appeals  from 
the  judgment  there  pronounced  that  judgment  must  fall.  It  matters  not 
that  the  contract  seems  a  fair  one.  Fraud  is  too  cunning  and  evasive  for 
courts  to  establish  a  rule  that  invites  its  presence,  .  .  .  nor  is  it  proper 
for  one  of  a  board  of  directors  to  support  his  contract  with  his  company 
upon  the  ground  that  he  abstained  from  participating  as  director  in  the 
negotiation  for  and  final  adoption  of  the  bargain  by  his  co-directors,  the 
very  words  in  which  he  asserts  his  right  declares  the  wrong;  he  ought  to 
have  participated,  and  in  the  interest  of  the  stockholders,  and  if  he  did  not, 
and  they  have  thereby  suffered  loss,  of  which  they  shall  be  the  judges,  he 
must  restore  the  rights  he  has  obtained — he  must  hold  against  them  no 
advantage  that  he  has  got  through  neglect  of  his  duty  toward  them." 
(See  also  Guild,  Exr.,  v.  Parker,  Recr.,  43  N.  J.  Law,  430;  Elkins  v.  Cam- 
den &  Atl.  R.  R.  Co.,  36  N.  J.  Eq.  467,  at  p.  470;  Gardner  v.  Butler,  30 
N.  J.  Eq.  702;  Stroud  v.  Consumers'  Water  Co.,  56  N.  J.  Law,  422,  427. 

This  rule,  however,  is  for  the  benefit  of  the  corporation,  and  as  to 
others  the  contract  is  valid  and  enforceable:  Barnes  v.  Trenton  Gas 
Light  Co.,  27  N.  J.  Eq.  2,2\  Stratton  v.  Allen.  16  N.  J.  Eq.  229.  And  so 
where  the  director  of  a  bank,  who  was  also  a  member  of  the  firm,  offered 
a  note  belonging  to  the  firm  to  the  bank,  for  discount,  which  was  procured 
from  the  maker  by  fraud,  of  which  he  as  a  member  of  the  firm  had 
notice,  it  was  held  that  the  knowledge  of  the  director  was  not  construc- 
tive notice  to  the  bank,  such  director  not  having  acted  with  the  board  in 
making  the  discount  and  not  having  communicated  his  knowledge  to  any 
of  the  officers  of  the  bank.  He  was  regarded  in  the  transaction  as  a 
stranger:    First  Natl.  Bank  of  Hightstown  v.  Christopher,  40  N.  J.  Law, 

435- 

A  director  of  two  corporations  which  contract  with  each  other  is  in- 


42  CORPORATION    LAW    OF    DELAWARE. 

capacitated  to  take  part  in  settling  the  terms  of  the  contract:  Met.  Tel. 
Co.  V.  Dom.  Tel.  Co.,  44  N.  J.  Eq.  568,  573- 

"The  directors  of  an  incorporated  company  cannot  speculate  with  the 
funds  or  credit  of  the  company,  and  appropriate  to  themselves  the  profits 
of  such  speculations.  They  cannot,  in  making  sales  or  purchases  for  the 
company,  take  advantage  of  their  position  as  directors,  and  either  directly 
or  indirectly  speculate  upon  the  company.  If  they  are  the  only  persons 
interested  as  stockholders,  yet,  if  such  speculations  impair  the  capital 
stock,  and  have  a  tendency  to  substitute  a  fictitious  for  a  real  value,  such 
transactions  are  opposed  to  the  policy  of  their  act  of  incorporation,  and 
cannot,  in  any  manner  be  countenanced  by  a  court  of  equity:"  Redmond 
V.  Dickerson  et  al.,  9  N.  J.  Eq.  507,  516. 

The  directors  are  vested  with  no  title  to  the  corporate  property;  they 
have  legal  privity  with  the  corporation  only,  and  for  the  consequences  of 
their  malfeasance  or  want  of  due  care  their  liability  is  to  it,  and  it  is  only 
on  the  refusal  of  the  corporation  to  sue  that  a  stockholder  may  do  so  on 
behalf  of  the  corporation  for  the  ultimate  benefit  of  himself  and  other 
stockholders:  Empire  State  Sav.  Bk.  v.  Beard,  81  Hun,  184,  and  cases 
cited;  Bloom  v.  Nat.  United  Benefit  Sav.  &  Loan  Co.,  81  Hun,  120. 

A  director  cannot,  while  serving  as  such,  divest  himself  of  the  knowl- 
edge which  he  has  acquired  in  confidence  of  corporate  afifairs  or  of  the 
value  of  corporate  property,  nor  be  allowed  to  use  it  to  his  own  advantage: 
Hoyle  V.  Pittsburgh  &  Montreal  R.  R.  Co.,  54  N.  Y.  329. 

The  relation  existing  between  a  director  and  the  corporation  is  that  of 
trustees:    Butts  v.  Wood,  2>7  N.  Y.  317. 

When  a  director  makes  an  assignment  of  his  estate  for  the  benefit  of 
creditors  he  ceases  to  be  a  director  de  jure,  and  the  company  may  declare 
his  office  vacant  and  elect  his  successor,  but  as  to  the  third  parties  dealing 
in  good  faith  with  the  company,  without  notice  of  any  infirmity  in  the  title 
of  the  director,  he  must  be  regarded  as  a  director  de  facto:  Kuser  v. 
Wright,  52  N.  J.  Eq.  825,  reversing  Wright  v.  First  Natl.  Bank,  52  N.  J. 
Eq.  392. 

A  person  is  not  a  director  though  nominated  and  elected  until  he  has 
accepted  the  office  either  expressly  or  impliedly:  Whittaker  v.  Amwell 
Nat.  Bank,  52  N.  J.  Eq.  400,  415. 

"It  may  sometimes  become  necessary  in  the  transaction  of  some  kind 
of  business  of  a  corporation  to  have  the  consent  of  all  the  stockholders, 
or  of  a  certain  proportion  of  them,  and  resolutions  giving  such  consent 
or  advice  have  the  efifect  of  empowering  the  directors  to  act.  But  the 
board  of  directors  is  the  legal  executive,  recognized  as  such  not  only  in 
practice  and  on  principle,  but  by  the  statute." 

"If  the  stockholders  in  a  corporation  disapprove  of  the  company's  man- 
agement, conducted  without  fraud  or  gross  abuse  of  trust,  or  consider 
their  speculation  a  bad  one,  their  remedy  is  to  elect  new  officers  or  sell 
their  shares  and  withdraw:"  McGill,  C,  in  Benedict  v.  Columbus  Con- 
struction Co.,  49  N.  J.  Eq.  2^. 

"Individual  stockholders  cannot  question,  in  judicial  proceedings,  cor- 


CORPORATION    LAW    OF    DELAWARE.  43 

porate  acts  of  directors  if  the  same  are  within  the  powers  of  the  corpora- 
tion, and,  in  furtherance  of  its  purposes,  are  not  unlawful  or  against  good 
morals,  and  are  done  in  good  faith  and  in  the  exercise  of  an  honest  judg- 
ment. Questions  of  policy  of  management,  of  expediency  of  contracts 
or  action,  of  adequacy  of  consideration  not  grossly  disproportionate,  of 
lawful  appropriation  of  corporate  funds,  are  left  solely  to  the  honest  de- 
cision of  the  directors  if  their  powers  are  without  limitation  and  free  from 
restraint.  To  hold  otherwise  would  be  to  substitute  the  judgment  and 
discretion  of  others  in  the  place  of  those  determined  on  by  the  scheme 
of  incorporation:"  Green,  V.  C,  in  EUerman  v.  Chicago  Junction,  etc.. 
Co.,  49  N.  J.  Eq.  217,  232.  See  also  Edison  v.  Edison  United  Phono- 
graph Co.,  52  N.  J.  Eq.  620. 

OFFICERS. 

Section  21.  Every  corporation  organized  under  this  act 
shall  have  a  president,  secretary  and  treasurer,  who  shall  be 
chosen  either  by  the  directors  or  stockholders,  as  the  by-laws 
may  direct,  and  shall  hold  their  offices  until  their  successors 
are  chosen  and  qualified;  the  president  shall  be  chosen  from 
among  the  directors ;  the  secretary  shall  be  sworn  to  the  faith- 
ful discharge  of  his  duty,  and  shall  record  all  the  proceedings 
of  the  meetings  of  the  corporation  and  directors  in  a  book 
to  be  kept  for  that  purpose,  and  perform  such  other  duties 
as  shall  be  assigned  to  him ;  the  treasurer  may  be  required  to 
give  bond  in  such  sum,  and  with  such  surety  or  sureties  as 
shall  be  provided  by  the  by-laws,  for  the  faithful  discharge  of 
his  duty. 

The  secretary  and  treasurer  may  or  may  not  be  the  same 
person. 

The  bond  of  an  ofificer  of  a  corporation  is  not  affected  by  an  increase 
of  its  capital  merely:    Bank  v.  Wollaston,  3  Harr.  90. 

The  limitation  of  suits  on  such  bonds  is  two  years  from  the  accruing 
of  the  cause  of  action;  and  in  case  of  a  deficit  the  act  would  begin  to 
run,  not  from  the  time  funds  were  actually  withdrawn,  but  from  the  time 
the  officer  failed  to  pay  them  over  according  to  his  bond:    lb. 

The  secretary,  who  as  such  is  the  keeper  of  the  books  of  an  incorpo- 
rated company,  and  who  is  counsel  for  it  in  the  trial  of  a  case  against  it 
in  court,  is  not  a  competent  witness  in  it:  Bancroft  v.  Wil.  Conf.  Acad.. 
5  Houst.  577. 

For  decision  on  the  form  and  sufficiency  of  bond  see  Farm.  &  Mech. 
Bank  v.  Polk,  i  Del.  Chan.  167. 

Where  A  becomes  surety  for  the  faithful  discharge  for  B's  duties,  the 
obligation  continues  so  long  as  B   holds  the  office  by  virtue  of  the  appoint- 


44  CORPORATION    LAW    OF    DELAWARE. 

ment  under  which  the  bond  is  given.  Though  the  office  be  usually  treated 
as  elective  for  one  year  only,  yet  the  surety  will  be  liable  for  B's  acts  if 
B  continue  in  office  after  the  year.  But  on  B's  re-election  and  qualifica- 
tion for  a  second  term  the  liability  on  the  old  bond  ceases:  Sparks  v. 
Farmers'  Bank,  3  Del.  Chan.  274. 

The  bank  owes  the  sureties  good  faith,  not  diligence,  in  the  examina- 
tion of  the  officers'  accounts:   lb. 

In  a  court  of  equity  the  statute  of  limitations  on  a  cause  of  action  which 
has  been  fraudulently  concealed,  runs  from  the  discovery  of  the  fraud:    lb. 

The  powers  of  the  officers  of  a  corporation  over  its  business  and  prop- 
erty are  strictly  those  of  agents — powers  either  conferred  by  the  charter, 
by-laws  or  delegated  to  them  by  the  directors  or  managers:  Fifth  Ward 
Savings  Bank  v.  First  Natl.  Bank,  48  N.  J.  Law,  513,  525;  Stokes  v.  N.  J. 
Pottery  Co.,  46  N.  J.  Law,  237. 

Where  an  officer  is  clothed  with  apparent  authority,  although  not  in- 
herent in  his  office,  the  general  doctrine  of  agency  applies,  and  the  cor- 
poration may  be  liable  for  his  acts.  The  authority  of  the  officer  does  not 
depend  so  much  on  his  title,  or  on  the  theoretical  nature  of  his  office,  as 
on  the  duties  he  is  in  the  habit  of  performing:  Fifth  Ward  Savings  Bank 
V.  First  Natl.  Bank,  48  N.  J.  Law,  513,  525;  Taylor  on  Corporations,  sec- 
tions 202,  236.  244;  see  also  Blake  v.  Domestic  Mfg.  Co.,  38  Atl.  Rep.  241. 

As  to  acts  of  an  extraordinary  nature,  an  officer  must  have  express 
authority  from  the  board  of  directors.  He  cannot  confess  judgment 
against  the  company:   Stokes  v.  N.  J.  Pottery  Co.,  46  N.  J.  Law,  237. 

The  proper  way  to  sign  corporate  contracts  is:    The 
Company,  by  President 

(or  other  officer  as  the  case  may  be),  and  not  merely  the  name  of  the 
officer  followed  by  his  official  title.  Such  titles  are  sometimes  held  to  be 
mere  words  of  description.  In  New  York  where  a  bank  discounted  for  a 
third  party  a  negotiable  promissory  note  reading  "We  promise  to  pay," 
etc.,  and  signed  by  the  individual  names  of  the  parties,  with  the  addition 
of  the  words  "President"  and  "Secretary,"  it  was  held  to  be  the  note  of 
the  individuals  signing  and  not  the  note  of  the  company:  First  Natl. 
Bank  v.  Wallis,  150  N.  Y.  455. 

A  contract  executed  in  the  name  of  the  corporation  by  its  president 
and  secretary  and  sealed  with  its  corporate  seal,  is  valid  and  binding 
upon  the  corporation  until  evidence  to  the  contrary  shall  be  produced: 
Jourdan  v.  L.  I.  R.  R.  Co.,  115  N.  Y.  385. 

Mr.  Taylor  says  concerning  de  facto  officers: 

"If  a  body  of  men  acting  as  a  corporation  permits  certain  persons  to 
act  openly  as  corporate  officers,  or  if  it  is  permitted  by  the  directors, 
assuming  them  to  have  had  the  power  to  appoint  the  officer  in  question, 
the  corporation  will  not,  to  the  detriment  of  persons  who  in  good  faith 
have  acted  on  the  assumption  that  the  persons  acting  as  officers  were  the 
officers  they  assumed  to  be,  be  permitted  to  impeach  the  validity  of  their 
acts  and  contracts  on  the  ground  that  such  persons  were  not  legally  cor- 
porate officers:"   Taylor  on  Corporations,  section  189. 


CORPORATION    LAW    OF    DELAWARE.  45 

AGENTS  AND  FACTORS. 

Section  22.  The  corporation  may  have  such  other  officers, 
agents  and  factors  as  may  be  deemed  necessary,  who  shall  be 
chosen  in  such  manner  and  hold  their  offices  for  such  terms  as 
may  be  prescribed  by  the  by-laws,  or  determined  by  the  board 
of  directors,  and  may  secure  the  fidelity  of  any  or  all  of  such 
officers  by  bond  or  otherwise;  and  may  also  provide  by  the 
by-laws  for  the  qualification  of  any  or  all  of  such  officers  be- 
fore any  person  authorized  by  law  to  administer  an  oath. 

A  failure  to  elect  annually  a  president,  secretary,  treasurer 
or  other  officers  shall  not  dissolve  a  corporation. 

Any  vacancy  occurring  among  the  directors  or  in  the  office 
of  president,  secretary  or  treasurer,  by  death,  resignation,  re- 
moval or  otherwise,  shall  be  filled  in  the  manner  provided 
for  in  the  by-laws;  in  the  absence  of  such  provision,  such 
vacancy  shall  be  filled  by  the  board  of  directors. 

See  section  2,  subd.  5,  and  notes. 

The  by-laws  of  a  corporation  are  evidence  against  its  officers,  though 
they  be  not  members  of  the  corporation:  Bank  of  Wil.  &  Brand,  v.  Wol- 
laston,  3  Harr.  90. 

A  corporation  is  Hable  for  the  neghgence  of  its  servant,  who  may  be 
proved  such,  without  showing  an  appointment  under  the  corporate  seal: 
Wilson  V.  Rockland  Manf.  Co.,  2  Harr.  67. 

The  acts  of  an  agent  in  the  general  course  of  his  employment  are  evi- 
dence against  the  principal,  without  proof  that  they  were  done  by  his 
orders:    Waples  v.  Waples,  i  Harr.  474. 

It  was  held  by  Clayton,  C.  J.,  in  the  case  of  Randel  v.  Ches.  &  Del. 
Canal  Co.,  that  in  an  action  of  covenant  against  a  corporation  a  contract 
made  and  executed  by  a  committee  of  the  board  of  directors,  but  not 
under  the  corporate  seal,  is  not  evidence;  though  the  authority  of  the 
committee  be  proved,  and  the  contract  actually  recognized  and  acted  upon 
by  the  company:    i  Harr.  233. 

What  constitutes  an  agency  is  a  question  of  law  addressed  to  the  court: 
Coe  V.  Johnson,  6  Houst.  9. 

The  ancient  rule  of  the  common  law  on  this  point  has  long  been  re- 
laxed, if  not  entirely  superseded,  both  in  this  country  and  in  England, 
until  at  length  corporations  in  regard  to  the  appointment  of  agents  and 
m;;king  of  contracts  are  now  placed  on  the  same  footing  as  individuals  in 
this  country.  ...  It  does  not  inure  to  the  benefit  of  another.  .  .  .  :  Van- 
degrift  v.  Del.  R.  R.  Co.,  2  Houst.  287,  288. 

A  corporation  can  only  act  by  and  through  the  agency  of  its  ofticers. 


46  CORPORATION    LAW    OF    DELAWARE. 

and  in  all  transactions  of  an  officer  and  agent  of  a  corporation  done  with 
the  approbation  of.  or  by  the  authority  of  his  principal,  notice  to  the 
agent  is  notice  to  the  principal,  and  the  knowledge  of  the  agent  is  the 
knowledge  of  the  principal,  for  no  principle  of  law  is  better  settled:  New- 
port Natl.  Bank  v.  Tweed,  4  Houst.  225,  232. 

A  person  dealing  with  a  corporation  is  chargeable  with  notice  of  its 
powers  and  the  purposes  for  which  it  was  formed,  and  when  dealing  with 
its  agents  or  ofificers  is  bound  to  know  the  extent  of  their  power  and 
authority.  A  corporation  necessarily  carries  its  charter  wherever  it  goes, 
for  that  is  the  law  of  its  existence:  Jennison  v.  The  Citizens'  Savings 
Bank,  122  N.  Y.  140;  Alexander  v.  Cauldwell,  83  N.  Y.  480;  see  also  Pat- 
terson V.  Robinson,  et  al.,  116  N.  Y.  193;  Wilson  v.  Kings  Co.  E.  R.  R. 
Co.,  114  N.  Y.  491;  Martin  v.  N.  F.  P.  Co.,  122  N.  Y.  165;  Wahlig  v. 
S.  P.  M.  Co..  25  N.  Y.  State  Rep.  864. 

TRUSTEE  MAY  VOTE  STOCK. 

Section  2^.  Persons  holding  stock  in  a  fiduciary  capacity 
shall  be  entitled  to  vote  the  shares  so  held,  and  persons  whose 
stock  is  pledged  shall  be  entitled  to  vote,  unless  in  the  transfer 
by  the  pledgor  on  the  books  of  the  corporation  he  shall  have 
expressly  empowered  the  pledgee  to  vote  thereon,  in  which 
case  only  the  pledgee,  or  his  proxy  may  represent  said  stock 
and  vote  thereon. 

A  formal  transfer  of  stock  on  the  books  of  the  company  is  not  necessary 
to  enable  an  executor,  administrator,  etc.,  to  vote.  The  corporation 
books  are  evidence  of  the  ownership  of  the  stock  by  the  testator  or  intes- 
tate, and  this  section  gives  to  the  executor  or  other  representative  virtute 
officii  the  right  to  vote  thereon  in  his  representative  capacity:  In  re  Elec- 
tion of  Cape  May,  etc.,  Nav.  Co.,  51  N.  J.  Law,  78. 

STOCK  BELONGING  TO  CORPOBATION. 

Section  24.  Shares  of  stock  of  the  corporation  belonging 
to  the  corporation  shall  not  be  voted  upon  directly  or  indi- 
rectly. 

This  prohibition  applies  to  all  stock  standing  in  the  name  of  the  com- 
pany itself,  or  one  of  its  ofificers  or  any  person  holding  in  trust  for  it 
directly  or  indirectly:  McNeely  v.  WoodrufT.  13  N.  J.  Law.  352;  Matter 
of  St.  Lawrence  S.  B.  Co.,  44  N.  J.  Law,  529. 

FIRST  MEETING. 

Section  25.  The  first  meeting  of  every  corporation  shall 
be  called  by  a  notice,  signed  by  a  majority  of  the  incorpo- 


CORPORATION    LAW    OF    DELAWARE.  47 

raters  named  in  the  certificate  of  incorporation,  designating 
the  time,  place  and  purpose  of  the  meeting;  and  such  notice 
shall,  at  least  two  weeks  before  the  time  of  any  such  meeting, 
be  published  three  times  in  some  newspaper  of  the  county 
where  the  corporation  may  be  established,  or  have  its  prin- 
cipal place  of  business;  or  said  first  meeting  may  be  called 
without  such  publication  of  notice  if  two  days'  notice  be  per- 
sonally served  on  all  the  parties  named  in  the  certificate  of 
incorporation,  or  if  all  the  parties  named  in  the  certificate 
shall,  in  writing,  waive  notice  and  fix  a  time  and  place  of  meet- 
ing, then  no  notice  or  publication  whatever  shall  be  required 
of  such  first  meeting. 

Where  all  the  incorporators  but  one  were  present  at  the  first  meeting, 
and  he  afterwards  assented  to  what  was  done,  the  incorporation  was  held 
to  be  valid,  although  no  notice  was  given:  Babbitt  v.  East  Jersey  Iron 
Co.,  I  Stew.  Dig.,  p.  208,  section  13. 

BY-LAWS:    BY  WHOM  MADE. 

Section  26.  The  power  to  make  and  alter  by-laws  shall  be 
in  the  stockholders,  but  any  corporation  may,  in  the  certifi- 
cate of  incorporation,  confer  that  power  upon  the  directors; 
by-laws  made  by  the  directors  under  power  so  conferred  may 
be  altered  or  repealed  by  the  directors  or  stockholders. 

See  section  2,  subd.  6,  and  notes. 

A  person  has  the  right  to  treat  the  by-laws  given  to  him  on  his  be- 
coming a  member  of  the  association  as  all  the  by-laws  such  association 
has,  and  he  is  not  bound  to  take  notice  of  modification  of  such  by-laws, 
with  respect  to  withdrawing,  on  the  record  of  the  company  simply  with- 
out further  notice  to  him;  which  notice  must  be  proven  by  the  defendant 
company  to  have  been  given:  McKenney  v.  Diamond  State  Loan  Asso., 
8  Houst.  557. 

A  court  will  not  presume  a  by-law,  although  upon  an  issue  of  fact  de- 
pending before  them,  they  might  instruct  the  jury  to  find  one,  upon  evi- 
dence of  long  and  ancient  usage:  State  v.  Wilmington  City  Council,  3 
Harr.  294-300. 

The  right  of  the  legislature  to  bestow  on  corporations  the  power  of 
internal  regulation;  and  the  capacity  of  corporations  to  receive  and  exer- 


48  CORPORATION    LAW    OF    DELAWARE. 

cise  such  power,  even  though  it  involve  legislative  power  within  the  cor- 
porate limits,  exist  at  common  law:   Rice  v.  Foster,  4  Harr.  479-503. 

INCREASE  OF  AUTHORIZED  CAPITAL  STOCK. 

Section  27,  Ever}'  corporation  organized  under  the  pro- 
visions of  this  act,  may,  at  any  meeting  called  for  that  pur- 
pose, notice  of  which  shall  be  given,  as  required  for  the  first 
meeting,  increase  its  capital  stock  and  the  number  of  shares 
therein  until  it  shall  reach  the  amount  named  in  the  original 
certificate,  and  every  stockholder  shall  have  a  certificate  under 
the  seal  of  the  corporation,  signed  by  the  president  and  treas- 
urer, certifying  the  number  of  shares  owned  by  him  in  such 
corporation. 

This  section  is  taken  from  section  18  of  the  general  incorporation  act 
of  1883. 

A  statement  issued  by  an  officer  of  a  loan  association  under  the  seal 
of  the  corporation  in  lieu  of  a  certificate  of  stock,  the  company  being  in 
the  habit  of  thus  certifying  to  stockholders,  is  binding  upon  the  corpora- 
tion, and  a  party  making  a  loan  of  money  on  the  faith  of  such  statement 
may  recover  from  the  corporation  the  value  thereof:  Richardson  v.  Del. 
Loan  Asso.,  9  Houst.  354. 

A  contract  providing  for  the  sale  of  stock  of  a  company  for  $10,500, 
$3,000  cash,  and  the  balance  to  be  paid  along,  as  may  suit  the  vendee, 
within  five  years;  interest  to  be  computed  at  five  per  cent.,  containing  no 
agreement  as  to  the  time  of  any  of  the  payments  of  the  principal  or  in- 
terest, no  statement  as  to  the  time  when  the  stock  is  to  be  transferred, 
with  no  security  for  the  deferred  payments,  is  too  uncertain  to  be  specifi- 
cally enforced  in  chancery  at  the  suit  of  the  vendee. 

Where,  by  the  terms  of  an  agreement  to  buy  stock  of  a  company,  a 
portion  of  the  purchase  price  is  to  be  paid  in  cash,  and  the  balance  within 
five  years,  and  no  payment  has  been  made,  an  offer  by  letter  to  pay  the 
whole  sum  after  the  five  years  have  expired,  and  after  the  vendor  has  dis- 
covered the  stock  to  be  more  valuable,  is  not  such  a  tender  as  to  entitle 
the  vendee  to  specific  performance. 

Where  one  who  is  secretary  of  a  stock  company  agrees  with  a  stock- 
holder to  buy  his  stock,  and,  during  the  negotiations,  endeavors  to  con- 
vince the  vendor  that  the  stock  is  not  worth  par,  and  that  he  does  not 
know  where  he  can  place  it,  while  in  fact  he  wished  it  for  himself,  and 
from  his  official  position  knows  the  stock  is  of  much  greater  value,  and 
when  he  has  made  no  payment  on  the  stock,  specific  performance  will 
not  be  decreed,  but  vendee  will  be  left  to  a  suit  at  law  to  recover  any 
damages  he  may  have  suffered  from  the  breach  of  contract:  Todd  v. 
Diamond  State  Iron  Co.,  8  Houst.  ^72. 


CORPORATION    LAW    OF    DELAWARE.  49 

INCREASE  OF  CAPITAL  STOCK  BY  AMENDMENT   TO 
CERTIFICATE. 

Section  28.  Whenever  more  capital  stock  is  deemed 
necessary  for  the  transaction  of  the  business  of  any  corpora- 
tion, created  under  the  provisions  of  this  act,  or  existing 
under  the  laws  of  this  state,  an  additional  certificate  may  be 
filed,  under  the  hands  and  seals  of  two-thirds  in  interest  of  the 
stockholders,  or  their  legal  representatives,  stating  the 
amount  of  such  additional  capital  required,  which  shall  be 
acknowledged,  filed  and  recorded  in  the  manner  heretofore 
provided  for  in  this  act,  with  respect  to  the  original  certifi- 
cate; and  the  said  corporation  shall  pay  to  the  secretary  of 
state  the  license  tax  required  by  law  upon  such  increase  of 
capital ;  provided,  that  for  all  stock,  issued  under  any  such 
supplemental  certificate,  such  corporation,  its  directors  and 
stockholders,  shall  be  entitled  to  the  benefits  and  subject  to 
all  the  liabilities  contained  in  this  act  as  to  such  corporation. 

This  section  is  practically  the  same  as  paragraph  4  of  sec- 
tion 18  of  general  incorporation  act  of  1883.  (See  section 
135.  post.) 

ASSESSMENT  OF  STOCK. 

Section  29.  The  directors  of  every  corporation  organized 
under  this  act,  may,  from  time  to  time,  assess  upon  each  share 
of  stock  not  fully  paid  up  such  sum  of  money  as  two-thirds 
of  the  stockholders  in  interest  shall  direct,  not  exceeding  in 
the  whole  the  balance  remaining  unpaid  on  said  stock  up  to 
the  par  value  thereof;  and  such  sum  so  assessed  shall  be  paid 
to  the  treasurer  at  such  times  and  by  such  instalments  as  the 
directors  shall  direct,  the  said  directors  having  given  thirty 
days'  notice  of  the  time  and  place  of  such  payments  in  a  news- 
paper of  the  county  where  such  corporation  is  established  or 
has  its  principal  place  of  business,  or  by  written  notice  mailed 
to  each  stockholder  at  his  last  known  post-office  address. 

See  section  7,  subd.  10;  also  sections  1.3  and  16,  ante,  and  notes. 
4 


50  CORPORATION    LAW    OF    DELAWARE, 

An  assurance  given  by  the  agent  of  the  commissioner  of  a  railroad  com- 
pany to  procure  subscriptions  to  the  stock,  to  a  subscriber  at  the  time  of 
his  subscribing  to  it  that  if  he  would  do  so.  the  railroad  of  the  company 
would  be  located  and  constructed  by  a  route  specifically  designated  by 
him,  and  on  the  faith  of  which  he  subscribed  for  one  hundred  shares  of 
the  stock,  but  which  assurance  was  not  embodied  in  the  contract  of  sub- 
scription, was  a  collateral  statement,  and  if  the  agent  at  the  time  he  made 
it  knew  it  to  be  untrue,  and  made  it  with  the  fraudulent  intent  to  mislead 
and  deceive  the  subscriber,  it  would  amount  to  a  fraud  which  will  vitiate 
and  avoid  his  contract  of  subscription. 

If  by  the  terms  of  the  charter  of  the  company  and  the  contract  of  sub- 
scription, and  the  contract  of  subscription  is  in  writing  under 
the  hand  of  the  subscriber,  the  stock  is  to  be  paid  for  in 
such  manner  and  proportion  and  at  such  times  as  shall  be  de- 
termined by  the  president  and  directors  of  the  company  and  in  such 
instalments  as  they  shall  require,  provided  that  no  payment  shall  be  de- 
manded until  at  least  thirty  days'  public  notice  shall  have  been  given  in 
at  least  one  newspaper  published  in  the  county  in  which  such  payment 
shall  be  demanded,  and  the  payment  of  it  is  so  called  for,  and  published 
in  five  successive  instalments,  the  six  years'  bar  of  the  statute  of  limita- 
tion will  not  begin  to  run  against  the  claim  of  the  company  from  the  date 
of  the  contract  of  subscription,  as  in  the  case  of  a  promissory  note  payable 
on  demand,  but  from  the  time  when  the  cause  of  action  accrued,  which 
was  not  until  it  became  payable  according  to  the  calls  for  the  instalments 
and  the  thirty  days'  publication  of  them;  and  if  they  had  been  even  so 
barred,  the  payment  of  the  first  within  the  six  years  would  have  taken 
the  claim  for  the  balance  out  of  the  operation  of  the  statute:  Kent 
County  R.  R.  Co.  v.  Wilson,  5  Houst.  49. 

The  subscription  to  stock  and  the  acceptance  of  a  certificate  for  shares 
constitute  a  contract  between  the  subscriber  and  the  company  by  which 
the  subscriber  agrees  to  pay  the  remaining  instalments  on  demand  by 
the  corporation:    Hood  z'.  McNaughton.  54  N.  J.  Law,  424. 

From  this  agreement  the  subscriber  cannot  recede  without  the  assent 
of  the  company:    lb. 

This  assent  is  evidenced  by  the  consummation,  in  the  form  required  by 
the  statute,  of  the  transfer  by  the  entry  of  the  name  of  the  transferee  on 
the  registry  of  stockholders  in  the  place  of  the  subscriber,  and  the  de- 
livery of  a  new  certificate  to  and  in  the  name  of  the  transferee:    lb. 

An  original  subscriber  may  transfer  his  stock  without  the  consent  of 
the  company  thus  evidenced  and  thereby  vest  in  the  purchaser  his  right 
in  the  shares  and  as  between  himself  and  such  purchaser  cast  upon  the 
latter  the  obligation  to  pay  him  such  instalments  as  are  called  upon  the 
stock,  but  the  original  subscriber  cannot  thereby  impair  or  affect  the 
contract  rights  of  the  company:    lb. 

His  liability  to  the  company  does  not  become  extinguished  until  the 
purchaser  is  accepted  by  the  company  as  the  stockholders  of  record  in 
his  place:   lb. 


CORPORATION    LAW    OF    DELAWARE.  51 

A  distinction  is  drawn  between  one  who  holds  the  stock  by  transfer 
and  an  original  subscriber.  The  former  may,  it  seems,  in  the  absence  of  a 
fraudulent  purpose,  discharge  himself  of  liability  for  unpaid  instalments 
by  due  transfer  of  his  shares,  although  the  transfer  may  not  be  recorded 
on  the  books  of  the  company:  Hood  v.  McNaughton.  54  N.  J.  Law, 
425,  428. 

The  latter  cannot  obtain  immunity  in  that  way:    lb. 

Holders  of  stock  given  as  bonus  are  liable  on  it  to  creditors,  but  not 
to  the  company:  Hebberd  v.  Southwestern  Cattle  Co.,  36  Atl.  Rep.  122, 
127. 

If  the  subscriber  to  stock  enters  into  a  corporation  generally,  without 
specific  stipulations,  he  is  bound  and  concluded  by  the  action  of  a  ma- 
jority of  the  corporation;  and  if  the  legislature  amends  and  changes  the 
charter,  with  the  assent  of  the  company,  he  will  not  thereby  be  dis- 
charged from  his  liability  for  subscription  of  stock,  made  previous  to  the 
change  of  the  charter,  unless  such  change  should  increase  the  amount 
which  he  was  originally  bound  to  pay:  Del.  R.  R.  Co.  v.  Thorp,  i 
Houst.  149. 

No  action  will  lie  on  a  stock  subscription  where  the  terms  of  the  sub- 
scription contain  no  promise  to  pay,  and  the  charter  only  authorizes  a 
forfeiture  of  stock  for  non-payment:  Odd  Fellows'  Hall  Co.  v.  Glazier, 
5  Harr.  172. 

COLLECTION  OF  ASSESSMENT. 

Section  30.  If  the  owner  of  any  shares  shall  neglect  to  pay 
any  sum  assessed,  for  thirty  days  after  the  time  appointed  for 
the  payment  thereof,  the  treasurer  of  the  corporation  when 
ordered  by  the  board  of  directors,  shall  sell  at  public  auction 
such  number  of  the  shares  of  such  delinquent  owner  as  will 
pay  all  assessments  then  due  from  him,  with  interest  and  all 
incidental  expenses,  and  shall  transfer  the  shares  so  sold  to 
the  purchaser,  who  shall  be  entitled  to  a  certificate  therefor. 
Notice  of  the  time  and  place  of  such  sale  and  of  the  sum  due 
on  each  share  shall  be  given  by  advertisement  for  three  weeks 
successively,  once  in  each  week  before  the  sale,  in  a  newspaper 
of  the  county  where  such  corporation  is  established ;  and 
notice  shall  be  mailed  by  the  treasurer  of  the  corporation  to 
such  delinquent  stockholder,  if  his  post-office  address  is 
known  twenty  days  before  such  sale. 

These  provisions  for  sale  for  non-payment  must  be  strictly  followed: 
Downing  v.  Potts,  3  Zab.  66. 


^2  CORPORATION    LAW    OF    DELAWARE. 

CERTIFICATE  OF  PAYMENT  OF  STOCK. 

Section  31.  The  president  and  directors  with  the  secretary 
and  treasurer  of  every  corporation  organized  under  this  act, 
upon  payment  of  each  instalment  of  capital  stock,  and  upon 
payment  of  each  instalment  of  every  increase  thereof,  shall 
make  a  certificate,  stating  the  amount  of  the  instalments  so 
paid,  and  whether  paid  in  cash  or  by  the  purchase  of  property, 
stating  also  the  total  amount  of  capital  stock,  if  any  previ- 
ously paid  and  reported,  which  certificate  shall  be  signed  and 
sworn  or  aliirmed  to  by  the  president,  and  secretary  or  treas- 
urer, and  they  shall,  within  thirty  days  after  the  making  of 
such  payment  or  payments  cause  the  certificate  to  be  filed  in 
the  ofiice  of  the  secretary  of  state. 

This  section  is  based  upon  section  20  of  the  incorporation 
act  of  1883,  and  closely  follows  section  25  of  the  corporation 
law  of  New  Jersey,  as  to  which  Mr.  Dill  says  that : 

"No  certificate  of  payment  of  capital  stock  is  apparently  required  to  be 
filed  until  the  full  amount  of  capital  stock  authorized  by  the  certificate 
of  incorporation  has  been  paid  in.  and  the  words  'every  increase  thereof 
contemplates  an  increase  beyond  the  amount  of  capital  stock  limited  in 
the  original  certificate,  such  increase  being  made  by  amendments  to  the 
original  certificate." 

It  is  held  in  N^ew  York  under  a  similar  provision  to  the  Delaware  act. 
"that  all  corporations  should  be  organized  with  a  bona  fide  capital  stock. 
to  be  issued  only  for  cash,  labor  or  property:"  Gen.  Elec.  Co.  r.  Wight- 
man,  3  N.  Y.  App.  Div.  118. 

The  statutory  requirement  that  the  payment  of  subscription?  to  the 
capital  stock  of  a  corporation  must  be  made  in  cash  or  property  or  serv- 
ices relates  only  to  domestic  corporations:    Boyer  v.  Fenn.  i8  Misc.  607. 

Where  a  part  or  the  whole  of  the  stock  of  a  corporation  has  been  paid 
for  by  the  purchase  of  property  at  its  fair  value,  the  holder  of  stock  thus 
paid  for  is  not  afterwards  liable  either  for  calls  by  the  corporation  or  for 
claims  against  it:    Powers  v.  Knapp,  85  Hun,  38. 

The  application  of  an  account  for  services  rendered  the  corporation  by 
a  subscriber  for  original  stock,  is  a  payment  in  money  within  the  meaning 
of  this  section:    Veeder  v.  Mudgett,  95  N.  Y.  295. 

The  statute  is  not  violated  in  respect  to  the  issuance  of  stock  in  pay- 
ment for  property,  unless  persons  acting  in  bad  faith  put  a  fictitious  value 
upon  the  property  for  the  purpose  of  evading  the  statute  and  defrauding 
others:    Van  Vleet  v.  Jones,  75  Hun.  340. 

See  White's  Manual,  p.  126. 


CORPORATION    LAW    OF    DELAWARE.  53 

PENALTY  FOB  DERELICTION  OF  OFFICERS. 

Section  32.  If  any  of  said  ofiticers  shall  neglect  or  refuse 
to  perform  the  duties  required  of  them  in  the  preceding  sec- 
tion for  thirty  days  after  written  request  so  to  do  by  a  creditor 
or  stockholder  of  the  corporation,  they  shall  be  jointly  and 
severally  liable  for  all  its  debts  contracted  after  the  making 
of  such  payments  as  provided  for  in  the  preceding  section 
and  before  the  filing  of  such  certificate. 

Upon  a  default  in  filing  the  report,  the  directors  are  personally  liable 
for  all  the  debts  of  the  corporation  then  existing,  even  though  such  debts 
are  not  due:    Carr  v.  Risher,  119  N.  Y.  177;  afifirming  50  Hun,  147. 

A  creditor  consenting  to  non-filing  of  report  cannot  take  advantage 
thereof:    Carraher  v.  Mulligan.  54  Hun.  638;  28  St.  Rep.  439. 

No  action  can  be  maintained  until  thirty  days  after  a  written  request 
has  been  made  by  a  creditor  or  stockholder  of  the  officers  to  make  a  cer- 
tificate and  their  neglect  or  refusal  so  to  do  within  that  time:  Nassau 
Bank  z:  Brown,  30  N.  J.  Eq.  478. 

REDUCTION  OF  CAPITAL  STOCK. 

Section  ^;^.  Any  corporation  organized  under  this  act, 
may  reduce  its  capital  stock  at  any  time  by  a  vote  of,  or  by  the 
written  consent  of  stockholders  representing  two-thirds  of  its 
capital  stock,  and  after  notice  of  the  proposed  decrease  has 
been  mailed  to  the  address  of  each  stockholder  at  least  twenty 
days  before  the  meeting  is  held  for  that  purpose;  and  a  state- 
ment of  the  reduction  shall  be  signed  and  acknowledged  by 
the  president  and  a  majority  of  the  directors,  and  filed  and  a 
certified  copy  thereof  recorded  in  the  same  manner  as  certifi- 
cates of  incorporation  are  required  to  be.  No  such  reduc- 
tion, however,  shall  be  made  in  the  stock  of  any  corporation 
until  all  its  debts  which  are  not  otherwise  fully  secured  shall 
have  been  paid  and  discharged. 

See  section  135,  post.  While  this  section  contains  no  limi- 
tation upon  the  amount  of  the  reduction  of  the  capital  stock, 
it  is  conceived  that  the  stock  cannot  be  reduced  below  two 
thousand  dollars  (section  6.  subd.  4,  ante). 


54  CORPORATION    LAW    OF    DELAWARE, 

DISSOLUTION. 

Section  34.  If  it  should  be  deemed  advisable,  in  the  judg- 
ment of  the  board  of  directors,  and  most  for  the  benefit  of  any 
corporation  organized  under  this  act,  that  it  should  be  dis- 
solved, the  board,  within  ten  days  after  the  adoption  of  a 
resolution  to  that  effect  by  a  majority  of  the  whole  board  at 
any  meeting  called  for  that  purpose,  of  which  meeting  every 
director  shall  have  received  at  least  three  days'  notice,  shall 
cause  notice  of  the  adoption  of  such  resolution  to  be  mailed 
to  each  stockholder  residing  in  the  United  States,  beginning 
within  said  ten  days  cause  a  like  notice  to  be  inserted  in  a 
newspaper  published  in  the  county  wherein  the  corporation 
shall  have  its  principal  office,  at  least  four  weeks  successively, 
once  a  week,  next  preceding  the  time  appointed  for  the  same, 
of  a  meeting  of  the  stockholders  to  be  held  at  the  office  of  the 
corporation,  to  take  action  upon  the  resolution  so  adopted 
by  the  board  of  directors,  which  meeting  shall  be  held  be- 
tween the  hours  of  ten  o'clock  in  the  forenoon  and  three 
o'clock  in  the  afternoon  of  the  day  so  named,  and  which  meet- 
ing may  on  the  day  so  appointed,  by  consent  of  a  majority  in 
interest  of  the  stockholders  present,  be  adjourned  from  time 
time,  for  not  less  than  eight  days  at  any  one  time,  of  which  ad- 
journed meeting  notice  by  advertisement  in  said  newspaper 
shall  be  given ;  and  if  at  any  such  meeting  two-thirds  in  inter- 
est of  all  the  stockholders  shall  consent  that  a  dissolution  shall 
take  place  and  signify  their  consent  in  writing,  such  consent 
together  with  a  list  of  the  names  and  residences  of  the  di- 
rectors and  officers,  certified  by  the  president  and  secretary  or 
treasurer,  shall  be  filed  in  the  office  of  the  secretary  of  state, 
who,  upon  being  satisfied  by  due  proof  that  the  requirements 
aforesaid  liave  been  complied  with,  shall  issue  a  certificate  that 
such  consent  has  been  filed,  and  the  board  of  directors  shall 
cause  such  certificate  to  be  published  four  weeks  successive'y. 
at  least  once  a  week,  in  a  newspaper  published  in  said  county; 
and  upon  the  filing  in  the  office  of  the  secretary  of  state  of  an 


CORPORATION    LAW    OF    DELAWARE.  55 

affidavit  of  the  manager  or  publisher  of  the  said  newspaper 
that  said  certificate  has  been  pubHshed  four  weeks  succes- 
sively, and  at  least  once  a  week  in  said  newspaper,  the  corpo- 
ration shall  be  dissolved ;  and  the  president  and  directors,  or 
the  managers  of  the  affairs  of  the  said  corporation,  at  the  time 
of  its  dissolution,  by  whatever  name  they  may  be  known  in 
law,  shall  be  trustees  of  such  corporation,  with  full  powers  to 
settle  the  affairs,  collect  the  outstanding  debts,  and  divide  the 
moneys  and  other  property  among  the  stockholders,  after 
paying  the  debts  due  and  owing  by  such  corporation,  at  the 
time  of  its  dissolution,  as  far  as  such  moneys  and  property 
shall  enable  them. 

Whenever  all  the  stockholders  shall  consent  in  writing  to  a 
dissolution,  no  meeting  or  notice  thereof  shall  be  necessary, 
but  on  filing  said  consent  in  the  office  of  the  secretary  of  state, 
he  shall  forthwith  issue  a  certificate  of  dissolution,  which  shall 
be  published  as  above  provided. 

See  sections  36  and  2)7  post. 

Where  the  dissolution  is  by  unanimous  consent  of  all  the  stockholders, 
affidavit  of  publication  is  apparently  not  expressly  required  to  be  filed 
with  the  secretary  of  state  as  a  condition  precedent  to  legal  dissolution, 
but  it  is  the  better  practice  to  file  such  affidavit. 

It  rests  in  the  judgment  of  the  directors  whether  the  stockholders  shall 
be  called  together  under  this  section.  "It  is  well  settled  that  the  share- 
holders in  a  corporation  cannot  extinguish  its  charter  or  dissolve  it,  and 
that  a  court  of  equity  cannot  dissolve  it  at  their  instance.  In  the  absence 
of  a  statutory  provision  the  franchises  can  be  declared  forfeited  and  ex- 
tinguished only  at  the  suit  of  the  state  in  an  appropriate  proceeding  at 
law.  .  .  .  But  when  it  plainly  appears  that  the  object  for  which  the  com- 
pany is  formed  is  impossible  of  attainment,  it  becomes  the  duty  of  the 
company's  agents  to  put  an  end  to  its  operations  and  wind  up  its  affairs, 
and  should  they,  even  though  supported  by  a  majority  of  the  shareholders, 
pursue  operations  which  must  eventually  be  ruinous,  any  shareholder  feel- 
ing aggrieved  would,  upon  plain  equitable  principle,  be  entitled  to  the 
assistance  of  this  court,  and  a  decree  should  be  made  compelling  the  di- 
rectors to  wind  up  the  company's  business  and  distribute  the  assets  among 
those  who  are  entitled  to  them,  unless  they  can  lawfully  be  used  for  other 
business  purposes  allowed  by  the  charter:"  Benedict  v.  Columbus  Con- 
struction Co.,  49  N.  J.  Eq.  22,,  26. 


56  CORPORATION    LAW    OF    DELAWARE. 

POWERS  OF  TRUSTEES  UPON  DISSOLUTION. 

Section  35.  The  persons  constituted  trustees  as  aforesaid 
shall  have  authority  to  sue  for  and  recover  the  aforesaid  debts 
and  property  by  the  name  of  the  trustees  of  such  corporation, 
describing  it  by  its  corporate  name,  and  shall  be  sueable  by 
the  same  name  for  the  debts  owing  by  such  corporation  at 
the  time  of  its  dissolution,  and  shall  be  jointly  and  severally 
responsible  for  such  debts  to  the  amount  of  the  moneys  and 
property  of  such  corporation  at  the  time  of  its  dissolution, 
which  shall  come  to  their  hands  or  possession. 

This  section  expressly  limits  the  Hability  of  the  directors  as  trustees  to 
the  extent  of  the  property  and  efifects  that  shall  come  into  their  hands: 
HofTman  z'.  Van  Nostrand,  42  Barb.  174. 

CONTINUANCE  OF  CORPORATION  AFTER  DISSOLUTION. 

Section  36.  All  such  corporations,  whether  they  expire  by 
their  own  limitation,  or  are  otherwise  dissolved,  shall  never- 
theless be  continued  for  the  term  of  three  years  from  such 
expiration  or  dissolution,  bodies  corporate  for  the  purpose 
of  prosecuting  and  defending  suits  by  or  against  them,  and 
enabling  them  gradually  to  settle  and  close  their  business, 
to  dispose  of  and  convey  their  property,  and  to  divide  their 
capital  stock,  but  not  for  the  purpose  of  continuing  the  busi- 
ness for  which  said  corporation  shall  have  been  established. 

In  a  suit  by  stockholders  of  a  dissolved  corporation  against  the  direct- 
ors for  mismanagement  of  its  affairs,  the  corporation  should  be  made  a 
party,  by  virtue  of  this  section.  Creditors  should  likewise  be  made  par- 
ties:   Camp  7'.  Taylor,  19  Atl.  Rep.  968. 

CHANCELLOR    MAY    APPOINT    TRUSTEES    AND    RECEIVERS. 

Section  ^y.  When  any  corporation  organized  under  this 
act  shall  be  dissolved  in  any  manner  whatever,  the  chancellor, 
on  application  of  any  creditor  or  stockholder  of  such  corpo- 
ration, at  any  time,  may  either  continue  such  directors,  trus- 
tees as  aforesaid,  or  appoint  one  or  more  persons  to  be  re- 
ceivers of  and  for  such  corporation,  to  take  charge  of  the 
estate  and  effects  thereof,  and  to  collect  the  debts  and  prop- 


CORPORATION    LAW    OF    DELAWARE.  57 

erty  due  and  belonging  to  the  company,  with  power  to 
prosecute  and  defend,  in  the  name  of  the  corporation,  or 
otherwise,  all  such  suits  as  may  be  necessary  or  proper  for  the 
purposes  aforesaid,  and  to  appoint  an  agent  or  agents  under 
them,  and  to  do  all  other  acts  which  might  be  done  by  such 
corporation,  if  in  being,  that  may  be  necessary  for  the  final 
settlement  of  the  unfinished  business  of  the  corporation ;  and 
the  powers  of  such  trustees  or  receivers  may  be  continued  as 
long  as  the  chancellor  shall  think  necessarj^  for  the  purpose 
aforesaid. 

A  receiver  appointed  by  the  circuit  court  of  the  city  of  Baltimore,  in  the 
state  of  Maryland,  is  not  entitled  to  an  injunction  of  the  court  of  chancery 
of  this  state,  to  restrain  the  collection  of  a  judgment  recovered  at  law 
in  this  state  by  creditors  of  an  insolvent  corporation,  nor  against  persons 
who  have  recovered  judgments  against  the  garnishees  of  such  insolvent 
corporation  under  process  of  foreign  attachment:  Stockbridge  v.  Beck- 
with,  6  Del.  Chan.  72. 

In  this  case  Chancellor  Saulsbury  in  his  opinion  said:  "A  receiver 
is  an  of^cer  of  the  court  appointing  him.  He  is  appointed  for  the  benefit 
of  all  parties  who  may  establish  rights  in  the  cause.  The  money  in  his 
hands  is  in  custodia  legis  for  whoever  can  make  out  a  title  to  it.  It  is  the 
court  itself  which  has  the  care  of  the  property  in  dispute. 

"The  receiver  is  but  the  creature  of  the  court.  He  has  no  powers  except 
such  as  are  conferred  upon  him  by  the  order  of  his  appointment,  and  the 
cause  and  practice  of  the  court.  A  receiver's  right  to  the  possession  of 
the  debtor's  property  is  limited  to  the  jurisdiction  of  his  appointment; 
and  he  has  no  lien  upon  the  property  of  the  debtor  except  for  that  which 
he  may  get  the  possession  of  without  suit,  or  for  that  which  after  having 
been  permitted  to  sue  for,  he  may  reduce  into  possession  in  that  way." 

"The  authority  of  the  chancellor  to  interpose  and  take  from  the  direct- 
ors the  power  to  close  up  the  business  of  the  corporation,  and  place  its 
affairs  in  charge  of  a  receiver,  is  a  discretionary  power,  to  be  exercised 
only  on  good  cause  shown — upon  circumstances  disclosed  by  the  proof 
■which  show  the  need  of  the  interference  of  the  court  for  the  protection  of 
creditors  or  stockholders  from  breaches  of  trust  by  the  directors  in  the 
performance  of  their  duties:"  Newfoundland  R.  R.  Construction  Co.  v. 
Schack,  40  N.  J.  Eq.  222,  229:  Rawnsley  v.  Trenton  Mut.  Life  Ins.  Co., 
9  N.  J.  Eq.  95,  347. 

In  National  Trust  Co.  v.  Miller,  32,  N.  J.  Eq.  155.  158.  it  was  said,  in 
substance,  that  the  receiver  of  a  corporation  was  an  ofificer  created  by  law 
for  the  protection  of  the  rights  of  the  creditors  of  the  corporation,  and 
to  accomplish  the  purposes  of  his  creation  it  was  indispensably  necessary 
that  he  should  be  clothed  with  their  attributes  and  equities.     The  receiver 


58  CORPORATION    LAW    OF    DELAWARE. 

is  the  representative  of  the  creditors,  and  as  such  may,  by  suit  or  defence, 
avoid  any  instrument  which  is  void  as  against  them.  As  such  representative 
he  may  sue  stockholders  at  law  for  unpaid  subscriptions:  Receiver  v. 
Spielmann,  50  N.  J.  Eq.  120,  796;  Hopper  v.  Lovejoy,  47  N.  J.  Eq.  573; 
Natl.  Trust  Co.  v.  Miller,  ^^  N.  J.  Eq.  155,  158;  Hood  v.  McNaughton, 
54  N.  J.  Law,  425;  Barkalow  v.  Totten,  53  N.  J.  Eq.  573;  Falk  v.  Whitman 
Cigar  Co.,  36  Atl.  Rep.  1094. 

By  a  prior  statute  of  this  state,  19  Del.  Laws,  chapter  181, 
the  chancellor  is  authorized  on  the  application  of  creditors 
or  stockholders  to  appoint  a  receiver  to  take  charge  of  the 
estate,  effects  and  business  of  an  insolvent  corporation,  but 
this  statute  does  not  provide  for  the  dissolution  of  a  corpo- 
ration. 

JURISDICTION  OF  CHANCELLOR. 

Section  38.  The  chancellor  shall  have  jurisdiction  of  said 
application  and  of  all  questions  arising  in  the  proceedings 
thereon,  and  may  make  such  orders  and  decrees  and  issue 
injunctions  therein  as  justice  and  equity  shall  require. 

DUTIES  OF  TRUSTEES  OR  RECEIVERS. 

Section  39.  The  said  trustees  or  receivers  after  payment 
of  all  allowances,  expenses  and  costs,  and  the  satisfaction  of 
all  special  and  general  liens  upon  the  funds  of  the  corpora- 
tion to  the  extent  of  their  lawful  priority,  shall  pay  the  other 
debts  due  from  the  corporation,  if  the  funds  in  their  hands 
shall  be  sufScient  therefor,  and  if  not,  they  shall  distribute 
the  same  ratably  among  all  the  creditors  who  shall  prove 
their  debts  in  the  manner  that  shall  be  directed  by  an  order  or 
decree  of  the  court  for  that  purpose ;  and  if  there  shall  be  any 
balance  remaining  after  the  payment  of  such  debts  and  neces- 
sary expenses,  they  shall  distribute  and  pay  the  same  to  and 
among  those  who  shall  be  justly  entitled  thereto,  as  having 
been  stockholders  of  the  corporation,  or  their  legal  repre- 
sentatives. 

SURRENDER  BEFORE  BEGINNING  BUSINESS. 

Section  40.  Before  the  payment  of  any  part  of  the  capital 
and  before  beginning  business  for  which  the  corporation  was 
created,  the  incorporators  named  in  any  certificate  of  incorpo- 


CORPORATION    LAW    OF    DELAWARE.  59 

ration  may  surrender  all  their  corporate  rights  and  franchises, 
by  filing  in  the  office  of  the  secretary  of  state  a  certificate,  veri- 
fied by  the  oath  or  affirmation  of  a  majority  of  the  incorpo- 
rators named  in  any  certificate  of  incorporation  that  no  part  of 
the  capital  has  been  paid  and  such  business  has  not  been  be- 
gun, and  surrender  all  rights  and  franchises,  and  thereupon 
the  said  corporation  shall  be  dissolved. 

As  this  section  gives  the  incorporators  named  in  the  certifi- 
cate the  power  to  surrender  all  their  corporate  rights  and 
franchises,  it  is  better  practice  to  have  all  the  incorporators 
named  make  oath  or  affirmation  to  the  certificate  to  be  filed 
in  the  office  of  the  secretary  of  state. 

NO  ABATEMENT   OF  ACTION. 

Section  41.  If  any  corporation  organized  under  this  act 
becomes  dissolved  by  the  expiration  of  its  charter  or  other- 
wise, before  final  judgment  obtained  in  any  action  pending  or 
commenced  in  any  court  of  record  of  this  state,  against  any 
such  corporation,  the  said  action  shall  not  abate  by  reason 
thereof,  but  the  dissolution  of  said  corporation  being  sug- 
gested upon  the  record,  and  the  names  of  the  trustees  or  re- 
ceivers of  said  corporation  being  entered  upon  the  record, 
and  notice  thereof  served  upon  said  trustees  or  receivers,  or 
if  such  service  be  impracticable  upon  the  counsel  of  record  in 
such  case,  the  said  action  shall  proceed  to  final  judgment 
against  the  said  trustees  or  receivers  by  the  name  of  the  cor- 
poration. 

FILING  OF  DECREE   OR  JUDGMENT. 

Section  42.  Whenever  any  corporation  is  dissolved  or  its 
charter  forfeited  by  decree  or  judgment  of  the  court  of  chan- 
cery, the  said  decree  or  judgment  shall  be  forthwith  filed  by 
the  register  in  chancery  of  the  county  in  which  such  decree 
or  judgment  shall  be  entered,  in  the  office  of  secretary  of 
state,  and  a  note  thereof  shall  be  made  by  the  secretary  of 
state  on  the  charter  or  certificate  of  incorporation,  and  on  the 


6o  CORPORATION    LAW    OF    DELAWARE. 

index  thereof,  and  be  published  by  him  in  the  next  volume 
of  laws,  which  he  shall  cause  to  be  published. 

SEBVICE  OF  LEGAL  PROCESS. 

Section  43.  Service  of  legal  process  upon  any  corporation 
created  under  this  act  shall  be  made  by  delivering  a  copy 
thereof  personally  to  the  president  of  such  corporation,  or  by 
leaving  the  same  at  his  dwelling-house  or  usual  place  of 
abode.  If  the  president  resides  out  of  the  state  service  there- 
of may  be  made  by  delivering  a  copy  thereof  to  the  secretary 
or  one  of  the  directors  of  said  corporation,  or  by 
leaving  the  same  at  the  dw^elling  house  or  usual  place  of 
abode  of  such  secretary  or  director,  or  at  the  principal  office 
or  place  of  business  of  the  corporation  in  this  state.  Service 
by  copy  left  at  the  dwelling-house  or  usual  place  of  abode, 
or  at  the  said  principal  office  or  place  of  business  in  this  state 
to  be  efifective  must  be  delivered  thereat  at  least  six  da)"^  be- 
fore the  return  of  the  process,  and  in  the  presence  of  an  adult 
person ;  and  the  officer  serving  the  process  shall  distinctly  state 
the  manner  of  service  in  his  return  thereto;  provided,  that 
process  returnable  forthwith  must  be  served  personally. 

This  section  prescribes  the  manner  in  which  a  stimuwns  may  be  served, 
and  has  no  application  beyond  the  first  process  in  the  cause.  As  to  sub- 
sequent process  "everything  must  depend  upon  the  circumstances  of  each 
particular  case,  having  regard  to  the  purposes  for  which  the  corporation 
was  created,  and  the  nature  of  the  duties  of  the  person  on  whom  service 
is  made,  either  in  his  ofificial  capacity,  or  by  the  usages  of  the  company. 
The  principle  is.  that  it  must  be  made  upon  some  person  upon  whom 
the  duty  devolves  by  virtue  of  his  official  position,  or  of  his  employment, 
to  communicate  the  fact  of  service  to  the  governing  power  in  the  cor- 
poration. A  service  on  such  a  person  is  a  service  on  the  corporation:" 
Dock  V.  Elizabethtown  Steam  Mfg.  Co..  34  N.  J.  Law,  312.  318;  Facts 
Pub.  Co.  t'.  Felton.  52  N.  J.  Law.  161.  But  see  Norton  z\  Berlin  Iron 
Bridge  Co.,  51  N.  J.  Law.  442. 

Nor  will  a  judgment  recovered  in  a  court  of  another  state,  by  the 
record  of  which  it  appeared  that  the  defendants  in  it  resided  at  the  time 
out  of  the  state  and  had  never  been  served  with  process  in  the  suit,  nor 
voluntarily  appeared  to  it.  be  considered  by  the  courts  in  this  state  to 
constitute  at  common  law  sufficient  prima  facie  evidence  of  a  legal   in- 


CORPORATION    LAW    OF    DELAWARE.  6l 

(iebtedness  on  the  part  of  the  defendants  to  the  plaintiff  in  it,  to  entitle 
the  latter  to  recover  here  upon  it  in  an  action  of  debt,  as  well  as  in  an 
action  of  indebitantus  assumpsit  on  the  judgment,  independent  of  the 
provision  of  the  constitution  and  the  act  of  congress  before  referred  to: 
Mitchell  Vance  &  Co.  v.  Ferris  &  Co.,  5  Houst.  34. 

For  general  statutory  provisions  respecting  service  of  process  upon  cor- 
porations see  Revised  Code,  p.  567. 

LIABILITY  OF  OFFICERS  AND  STOCKHOLDERS. 

Section  44.  When  the  officers,  directors  or  stockholders 
of  any  corporation,  organized  under  this  act,  shall  be  liable 
by  the  provisions  of  this  act,  to  pay  the  debts  of  the  corpora- 
tion, or  any  part  thereof,  any  person  to  whom  they  are  liable 
may  have  an  action  on  the  case  against  any  one  or  more  of 
them  and  the  declaration  shall  state  the  claim  against  the  cor- 
poration, and  the  ground  on  which  the  plaintiff  expects  to 
charge  the  defendants  personally ;  or  the  person  to  whom  they 
are  liable  may  have  his  remedy  by  bill  in  chancery. 

See  section  7,  subd.  10.     Also  section  14,  ante,  and  notes. 

Sections  44  and  46  relate  to  cases  where  officers,  directors 
or  stockholders  are  made  specifically  liable  by  the  provisions 
of  the  act  for  the  payment  of  the  debts  of  the  company,  and 
provide  in  such  cases  for  actions  by  the  creditor.  They  do 
not  relate  to  actions  against  stockholders  to  enforce  payment 
of  subscriptions  for  stock. 

The  statutory  liability  of  stockholders  in  foreign  corporations  for  debts 
of  the  corporation  cannot  be  enforced  except  at  the  domicile  of  the  cor- 
poration, when  the  law  of  the  domicile  provides  the  remedy:  Marshall  z'. 
Sherman,  148  N.  Y.  9;  reversing  84  Hun,  186. 

In  New  Jersey  it  is  held  that  equity  proceedings  under  sections  92  and 
94  of  the  New  Jersey  law  (which  correspond  with  sections  44  and  46  of 
the  Delaware  law)  must  be  by  general  creditors'  bill  for  the  benefit  of  all 
creditors:    Wetherbee  v.  Baker,  35  N.  J.  Eq.  501,  505. 

REMEDY  AGAINST  CORPORATION  FOR  DEBTS  PAID. 

Section  45.  When  any  officer,  director  or  stockholder 
shall  pay  any  debt  of  a  corporation  for  which  he  is  made  liable 
by  the  provisions  of  this  act,  he  may  recover  the  amount  so 
paid,  in  an  action  against  the  corporation  for  money  paid 


62  CORPORATION    LAW    OF    DELAWARE. 

for  its  use,  and  in  which  action  only  the  property  of  the  cor- 
poration shall  be  liable  to  be  taken,  and  not  the  property  of 
any  stockholder. 

DIRECTOR  OR   STOCKHOLDER'S   LIABILITY   SECONDARY. 

Section  46.  No  sale  or  other  satisfaction  shall  be  had  of 
the  property  of  any  director  or  stockholder  for  any  debt  of 
a  corporation  organized  as  aforesaid,  of  which  he  is  such  di- 
rector or  stockholder  until  judgment  be  obtained  therefor 
against  such  corporation  and  execution  thereon  returned  un- 
satisfied, but  any  suit  brought  against  any  director  or  stock- 
holder for  such  debts  shall  be  stayed,  after  execution  levied, 
or  other  proceedings  to  acquire  lien,  until  such  return  shall 
have  been  made. 

In  order  to  be  entitled  to  a  recovery  from  a  stockholder,  the  issuance 
and  return  unsatisfied  of  an  execution  on  the  judgment  which  is  the 
foundation  of  the  suit,  must  be  shown:  Terry  v.  Rothschild,  83  Hun,  486. 
In  Handy  v.  Draper.  89  N.  Y.  337.  the  corporation  is  treated  as  the 
primary  debtor  and  the  liability  of  the  stockholder  is  ultimate  and  sub- 
sidiary. 

RECEIVERS  OR  TRUSTEES  MUST  FILE  INVENTORY. 

Section  47.  Receivers  or  trustees  shall,  as  soon  as  con- 
venient, file  in  the  of^ce  of  the  register  in  chancery  of  the 
county  in  which  the  corporation's  principal  place  of  business 
is  a  full  and  complete  inventory  of  all  the  estate,  property  and 
effects  of  the  corporation,  its  nature  and  probable  value,  and 
an  account  of  all  debts  due  from  and  to  it.  as  nearly  as  the 
same  can  be  ascertained,  and  make  a  report  to  the  court  of 
their  proceedings,  whenever  and  as  often  as  the  court  shall 
direct. 

By  the  New  Jersey  act  receivers  are  required  to  make  a 
report  of  their  proceedings  to  the  court  of  chancery  every'  six 
months  during  the  continuance  of  the  trust  (section  74,  "Act 
concerning  Corp.").  In  Delaware  no  regular  time  is  specified 
for  filing  reports. 


CORPORATION    LAW    OF    DELAWARE.  63 

PROOF  OF  CLAIMS  AGAINST  CORPORATIONS. 

Section  48.  All  creditors  shall  make  proof  under  oath  of 
their  respective  claims  against  the  corporation,  and  cause  the 
same  to  be  filed  in  the  of^ce  of  the  register  in  chancery  of  the 
county  in  which  the  corporation's  principal  place  of  business 
is,  within  six  months  from  the  date  of  the  appointment  of  a 
receiver  or  trustee  for  such  corporation,  or  sooner  if  the  court 
shall  order  and  direct,  and  all  creditors  and  claimants  failing 
to  do  so,  within  the  time  limited  by  this  act,  or  the  time  pre- 
scribed by  the  order  of  the  court  may,  by  direction  of  the 
court  be  barred  from  participating  in  the  distribution  of  the 
assets  of  the  corporation ;  the  court  may  also  prescribe  what 
notice,  by  publication  or  otherwise,  shall  be  given  to  creditors 
of  the  time  fixed  for  the  filing  and  making  proof  of  said  claim. 

Section  34  provides  that  upon  dissolution  of  a  corporation 
the  president  and  directors  shall  be  the  trustees  of  said  corpo- 
ration with  full  power  to  collect  the  assets,  pay  the  debts  and 
settle  the  affairs  generally  of  a  corporation,  which  power  is 
liable  to  be  superseded  by  order  of  the  court  of  chancery  at 
the  suit  of  a  creditor  or  stockholder,  in  accordance  with  sec- 
tion T^y,  ante.  It  would  therefore  seem  that  the  limitation 
as  to  time  of  filing  claims  under  the  above  section  (48)  is  ap- 
plicable only  when  such  appointment  has  been  made  by  the 

court. 

ADJUSTMENT  OF  CLAIMS. 

Section  49.  It  shall  be  the  duty  of  the  register  in  chan- 
cery, immediately  upon  the  expiration  of  the  time  fixed  for 
the  filing  of  claims,  in  compliance  with  the  provisions  of  the 
preceding  section  of  this  act,  to  notify  the  receiver  or  trustee 
of  the  filing  of  said  claims,  and  it  shall  be  the  duty  of  said  re- 
ceiver or  trustee  within  thirty  days  after  receiving  said  notice, 
to  inspect  said  claims,  and  if  said  trustee  or  any  creditor  shall 
not  be  satisfied  with  the  validity  or  correctness  of  the  same, 
or  any  of  them,  said  receiver  or  trustee  shall  forthwith  notify 
the  creditors,  whose  claims  are  disputed,  of  his  decision ;  the 
said  receiver  or  trustee  shall  require  all  creditors  whose  claims 
are  disputed  to  submit  themselves  to  such  examination  in  re- 


64  CORPORATION    LAW    OF    DELAWARE. 

lation  to  their  claims  as  the  receiver  or  trustee  shall  direct, 
and  such  creditors  shall  produce  such  books  and  papers  re- 
lating to  their  claims  as  shall  be  required ;  and  the  receiver  or 
trustee  shall  have  power  to  examine,  under  oath  or  affirma- 
tion, all  witnesses  produced  before  him  touching  the  claims, 
and  shall  pass  upon  and  allow  or  disallow  the  claims,  or  any 
part  thereof,  and  notify  the  claimants  of  his  determination. 

Provided,  however,  that  every  creditor  or  claimant,  when  he 
shall  have  received  notice  from  said  receiver  or  trustee,  that  he 
is  not  satisfied  with  the  said  claim  as  filed  in  the  office  of  the 
register  in  chancery,  shall  have  the  right,  within  ten  days 
thereafter,  to  demand  that  the  said  receiver  or  trustee  shall 
certify  the  said  claim  to  the  court  of  chancery,  which  court 
shall  have  jurisdiction  to  pass  upon  the  said  claim  as  pre- 
sented, and  to  determine  the  rights  of  the  claimant,  and  to 
make  such  order  or  decree  touching  the  same  as  shall  be 
equitable  and  just ;  and  provided,  further.that  when  any  cred- 
itor or  claimant  shall  submit  himself  to  such  examination  in 
relation  to  his  claim,  as  the  receiver  or  trustee  shall  direct, 
and  the  receiver  or  trustee  shall  pass  upon  and  allow  or  dis- 
allow such  claim,  the  creditor  or  claimant  so  submitting  him- 
self, or  any  other  creditor  or  claimant,  shall  have  the  right  of 
appeal  to  the  court  of  chancery,  which  court  shall  hear  and 
determine  the  rights  of  the  claimant,  and  shall  make  such 
order  or  decree  touching  the  same  as  shall  be  equitable  and 
just. 

See  note,  section  48,  ante. 

These  provisions  would  seem  to  give  the  court  power  to  consider  and 
determine  every  question  brought  before  the  receiver  for  their  action,  and 
by  which  action  any  creditor  could  complain  of  being  aggrieved:  Jackson 
V.  People's  Bank,  9  N.  J.  Eq.  205. 

In  Leo  V.  Green.  52  N.  J.  Eq.  i.  the  chancellor  held  that  a  delay  for 
eight  years  in  appealing  from  a  receiver's  disallowance  of  a  claim,  where 
repeated  notices  had  been  given  of  an  order  limiting  appeals,  was  a  bar 
to  any  relief. 

Where  there  is  the  same  receiver  for  two  corporations,  one  of  which, 
as  part  of  its  assets,  owns  stock  in  the  other,  a  creditor  of  the  one  may 


CORPORATION    LAW    OF    DELAWARE.  65 

appeal  from  an  allowance  of  a  claim  against  the  other:    Blake  v.  Domes- 
tic Mfg.  Co.,  38  Atl.  Rep.  241. 

BECEIVER  TO  BE  MADE  A  PARTY  TO  SUITS. 

Section  50.  A  receiver  shall,  upon  application  by  him  in 
the  court  in  which  any  suit  is  pending,  be  substituted  as  party 
plaintiff  or  complainant  in  the  place  and  stead  of  the  corpo- 
ration in  any  suit  or  proceeding  at  law  or  in  equity  which  was 
so  pending  at  the  time  of  his  appointment;  and  no  action 
against  a  receiver  of  a  corporation  shall  abate  by  reason  of 
his  death,  but,  upon  suggestion  of  the  facts  on  the  record, 
shall  be  continued  against  his  successor  or  against  the  corpo- 
ration in  case  no  new  receiver  is  appointed. 

SALE  OF  PERISHABLE  OR  DETERIORATING  PROPERTY. 

Section  51.  Whenever  the  property  of  an  insolvent  cor- 
poration is  at  the  time  of  the  appointment  of  a  receiver  or 
trustee  encumbered  with  liens  of  any  character,  and  the  va- 
lidity, extent  or  legality  of  any  such  lien  is  disputed  or 
brought  in  question,  and  the  property  of  the  corporation  is 
of  a  character  which  will  deteriorate  in  value  pending  the 
litigation  respecting  such  lien,  the  court  of  chancery  may 
order  the  receiver  or  trustee  to  sell  the  property  of  the  cor- 
poration, clear  of  all  incumbrances,  at  public  or  private  sale 
for  the  best  price  that  can  be  obtained  therefor,  and  pay  the 
net  proceeds  arising  from  the  sale  thereof  after  deducting  the 
costs  of  such  sale  into  the  court,  there  to  remain  subject  to 
the  order  of  the  said  court,  and  to  be  disposed  of  as  the  court 
shall  direct. 

This  act  is  remedial  in  its  nature,  and  should  receive  a  liberal  construc- 
tion. The  object  of  the  legislature  was  the  prevention  of  loss  by  the  de- 
preciation in  value  of  the  property,  pending  protracted  litigation.  The 
mischief  and  the  remedy  proposed  are  plainly  apparent  upon  the  face  of 
the  act.  It  was  not  intended  to  confine  the  remedy  to  mischief  arising 
from  litigation  of  any  particular  character,  but  to  all  litigations  between 
incumbrances  respecting  the  validity,  extent  or  priority  of  their  liens. 
The  act  must  be  so  construed  as  to  suppress  the  mischief  and  advance 
the  remedy:  Randolph  v.  Larned,  27  N.  J.  Eq.  557,  560. 
5 


66  CORPORATION    LAW    OF    DELAWARE, 

LIEN  OF  EMPLOYES. 

Section  52.  Whenever  any  corporation,  formed  under  the 
provisions  of  this  act,  shall  become  insolvent,  the  employes 
doing  labor  or  service  of  whatever  character  in  the  regular 
employ  of  such  corporation,  shall  have  a  lien  upon  the  assets 
thereof  for  the  amount  of  the  wages  due  to  them,  not  ex- 
ceeding two  months'  wages  respectively,  which  shall  be  paid 
prior  to  any  other  debt  or  debts  of  said  corporation ;  but  the 
word  "employes"  shall  not  be  construed  to  include  any  of 
the  officers  of  such  corporation. 

In  Consolidated  Coal  Co.  v.  Keystone  Chemical  Co.,  54  N.  J.  Eq.  30Q, 
it  was  held  that  a  bookkeeper,  although  a  director,  in  the  regular  em- 
ploy of  the  corporation,  was  entitled  to  the  lien  given  by  the  statute. 

The  president  is  not  entitled  to  a  lien  for  services  as  president;  he  is 
a  member  of  the  corporation  and  cannot  be  both  employer  and  employe. 
The  word  laborers  includes  "all  persons  doing  labor  or  service  of  what- 
ever character  for  or  as  workmen  or  employes  in  the  regular  employ  of 
such  corporation:"  England's  Executors  v.  Beatty  Organ  Co.,  41  N.  J. 
Eq.  470. 

In  Fitzgerald  v.  Maxim  Powder  Mfg.  Co.,  35  Atl.  Rep.  1064,  the  word 
"assets"  was  construed  to  include  the  entire  assets  or  property  of  the 
corporation  which  came  to  the  receiver  for  administration,  whether  in- 
cumbered by  previous  liens  or  not,  with  certain  exceptions.  It  was  held, 
therefore,  that  the  lien  of  laborers  was  prior  to  the  lien  of  a  judgment 
entered  before  the  insolvency  of  the  company. 

The  right  of  preference  is  statutory  and  does  not  vest  until  the  hap- 
pening of  the  statutory  requirements.  It  is  created  only  when  insolvency 
proceedings  are  begun  and  then  arises  in  favor  of  those  persons  and  for 
such  amounts  and  under  such  conditions  as  the  legislation  on  the  subject 
then  in  force  may  prescribe.  The  law  recognizes  no  distinction  between 
apprentices  and  other  employes:  Mingin  v.  Alva  Glass  Mfg.  Co.,  2>7 
Atl.  458. 

This  section  being  in  derogation  of  the  common  right  of  creditors  of 
the  same  class  to  be  paid  equally  must  be  construed  strictly.  And  the 
right  conferred  by  it  is  held  to  be  personal,  inhering  in  the  person  alone 
who  actually  performs  labor  or  services:  Lfehigh  Coal  &  Nav.  Co.  v. 
C.  R.  R.  of  N.  J.,  29  N.  J.  Eq.  252. 

A  contractor  cannot  have  the  benefit  of  the  act:    lb. 

Where  A  entered  into  agreement  with  a  corporation  to  serve  it  for  a 
term  of  years  at  a  fixed  salary,  and  before  the  term  expired  the  corpora- 
tion became  insolvent  and  a  receiver  was  appointed.  A  is  entitled  to  dam- 
ages for  breach  of  contract,  but  his  claim  for  the  amount  of  such  damages 
is  not  preferred:    Spader  v.  Mural  Dec.  Co..  47  N.  J.  Eq.  18. 


I  CORPORATION    LAW    OF    DELAWARE.  fyj 

COMPENSATION  OF  RECEIVERS. 

Section  53.  The  court  of  chancery,  shall  before  making 
distribution  of  the  assets  of  an  insolvent  corporation,  among 
the  creditors  or  stockholders  thereof,  allow  a  reasonable 
compensation  to  the  receiver  or  trustee  for  his  services,  and 
the  costs  and  expenses  incurred  in  and  about  the  execution 
of  his  trust,  and  the  costs  of  the  proceedings  in  said  court,  to 
be  first  paid  out  of  said  assets. 

CONSOLIDATION    OF   CORPORATIONS. 

Section  54.  Any  two  or  more  corporations  organized 
under  the  provisions  of  this  act,  or  existing  under  the  laws 
of  this  state,  for  the  purpose  of  carrying  on  any  kind  of  busi- 
ness of  the  same  or  a  similar  nature,  may  consolidate  into  a 
single  corporation  which  may  be  either  one  of  said  consol- 
idating corporations,  or  a  new  corporation  to  be  formed  by 
means  of  such  consolidation ;  the  directors  or  a  majority  of 
them,  of  such  corporations  as  desire  to  consolidate,  may  enter 
into  an  agreement  signed  by  them,  and  under  the  corporate 
seals  of  the  respective  corporations,  prescribing  the  terms  and 
conditions  of  consolidation,  the  mode  of  carrying  the  same 
into  efifect,  and  stating  such  other  facts  as  are  necessary  to  be 
set  out  in  articles  of  incorporation,  as  provided  in  this  act, 
as  Vk^ell  as  the  manner  of  converting  the  shares  of  each  of  the 
old  corporations  into  the  new,  with  such  other  details  and 
provisions  as  are  deemed  necessary. 

Written  notice  of  the  time  and  place  of  a  meeting  to  con- 
sider the  purpose  of  entering  into  such  an  agreement,  shall 
be  mailed  to  the  last  known  post-office  address  of  each  stock- 
holder of  each  corporation,  at  least  twenty  days  prior  to  the 
time  of' such  meeting,  and  such  notice  shall  be  published  at 
least  two  weeks  in  some  newspaper  printed  and  circulated  in 
the  county  of  the  principal  place  of  business  of  each  corpora- 
tion, and  the  written  consent  of  the  owners  of  at  least  two- 
thirds  of  the  capital  stock  of  each  corporation  shall  be  neces- 
sary to  the  validity  and  adoption  of  such  an  agreement;  that 


68  CORPORATION    LAW    OF    DELAWARE. 

fact  shall  be  certified  thereon  by  the  secretary  of  each  of  the 
respective  corporations,  under  the  seal  thereof,  and  the  agree- 
ment, so  adopted  and  so  certified  and  acknowledged  as  herein 
provided  for  original  certificates  of  incorporation,  and  filed 
and  a  certified  copy  thereof  recorded  in  the  same  manner  as 
certificates  of  incorporation  are  required  to  be;  said  certifi- 
cate, or  a  copy  thereof  duly  certified  by  the  secretary  of  state, 
shall  be  evidence  in  all  courts  of  law  and  equity  in  this  state. 

It  is  not  against  public  policy  for  two  corporations  engaged  in  the  same 
general  line  of  business  to  consolidate:  Cameron  v.  N.  Y.  &  Mt.  V.  Water 
Co.,  62  Hun,  269;  affirmed  on  other  grounds,  133  N.  Y.  336;  Holmes  & 
Griggs  Mfg.  Co.  V.  Holmes  &  W.  M.  Co.,  127  N.  Y.  252. 

A  contract  between  two  corporations  is  not  vitiated  by  the  fact  that 
some  of  the  officers  were  directors  in  both  corporations,  in  the  absence 
of  fraud  or  bad  faith  on  their  part:  Genesee  Valley  &  Wyoming  Ry.  Co. 
V.  Retsof  Mining  Co.,  15  Misc.  187. 

NATURE   OF   CONSOLIDATED   CORPORATIONS. 

Section  55.  When  the  agreement  is  signed,  acknowl- 
edged, filed  and  recorded,  as  in  the  preceding  section  is  re- 
quired, the  separate  existence  of  the  constituent  corporations 
shall  cease,  and  the  consolidated  corporations  shall  become  a 
single  corporation  in  accordance  with  the  said  agreement, 
possessing  all  the  rights,  privileges,  powers  and  franchises,  as 
well  of  a  public  as  of  a  private  nature,  and  being  subject  to 
all  the  restrictions,  disabilities  and  duties  of  each  of  such  cor- 
porations so  consolidated,  and  all  and  singular,  the  rights, 
privileges,  powers  and  franchises  of  each  of  said  corporations, 
and  all  property,  real,  personal  and  mixed,  and  all  debts  due 
on  whatever  account,  as  well  for  stock  subscriptions  as  all 
other  things  in  action  or  belonging  to  each  of  such  corpora- 
tions shall  be  vested  in  the  consolidated  corporation ;  and  all 
property,  rights,  privileges,  powers  and  franchises,  and  all 
and  every  other  interest  shall  be  thereafter  as  effectually  the 
property  of  the  consolidated  corporation  as  they  were  of  the 
several  and  respective  former  corporations,  and  the  title  to  anv 
real  estate,  whether  by  deed  or  otherwise,  under  the  laws  of 


CORPORATION    LAW    OF    DELAWARE.  69 

this  State,  vested  in  either  of  such  corporations,  shall  not  re- 
vert or  be  in  any  way  impaired  by  reason  of  this  act;  pro- 
vided, that  all  rights  of  creditors  and  all  liens  upon  the  prop-  )<L. 
erty  of  either  of  said  former  corporations  shall  be  preserved  ' 
unimpaired,  and  all  debts,  liabilities  and  duties  of  the  respec- 
tive former  corporations  shall  thenceforth  attach  to  said  con- 
solidated corporation,  and  may  be  enforced  against  it  to  the 
same  extent  as  if  said  debts,  liabilities  and  duties  had  been 
incurred  or  contracted  by  it. 

The  existence  of  the  old  corporations  is  upon  the  merger  terminated, 
and  their  stockholders  become,  ipso  facto,  such  shareholders  of  the  new 
corporation  as  will  qualify  them  to  be  elected  directors:  Camden  Safe,  etc., 
Co.  I'.  Burlington  Carpet  Co.,  33  Atl.  Rep.  480.  For  discussion  and  con- 
struction of  these  provisions  for  merger,  see  Trenton  Pass.  R.  R.  z'.  Wil- 
son, 37  Atl.  Rep.  476. 

PAYMENT  FOR  STOCK  OF  DISSATISFIED   STOCKHOLDERS. 

Section  56.  If  any  stockholder  in  either  corporation  con- 
solidating as  aforesaid,  who  objected  thereto  in  writing,  shall 
within  twenty  days  after  the  agreement  of  consolidation  has 
been  filed  and  recorded,  as  aforesaid,  demand  in  writing  from 
the  consolidated  corporation  payment  of  his  stock,  such  con- 
solidated corporation  shall,  within  three  months  thereafter, 
pay  to  him  the  value  of  the  stock  at  the  date  of  consolidation ; 
in  case  of  disagreement  as  to  the  value  thereof,  it  shall  be  as- 
certained by  three  disinterested  persons,  one  of  whom  shall 
be  chosen  by  the  stockholder,  one  by  the  directors  of  the  con- 
solidated corporation  and  the  other  by  the  two  selected  as 
aforesaid ;  and  in  case  the  said  award  is  not  paid  within  sixty 
days  from  the  making  thereof,  and  notice  thereof  given  to 
said  stockholder  and  said  consolidated  corporation,  the 
amount  of  the  award  shall  be  evidence  of  the  amount  due 
by  said  corporation,  and  may  be  collected  as  other  debts  are 
by  law  collectible ;  on  receiving  payment  of  the  award,  said 
stockholder  shall  transfer  his  stock  to  the  said  consolidated 
corporation,  to  be  disposed  of  by  the  directors  thereof,  or  to 
be  retained  for  the  benefit  of  the  remainino-  stockholders. 


70  CORPORATION    LAW    OF    DELAWARE. 

ACTION  AGAINST   CONSOLIDATING   CORPORATION. 

Section  57.  Any  action  or  proceeding  pending  by  or 
against  either  of  the  corporations  consolidated  may  be  pros- 
ecuted to  judgment,  as  if  such  consoHdation  had  not  taken 
place,  or  the  new  corporation  may  be  substituted  in  its  place. 

LIABILITY  OF  CORPORATIONS. 

Section  58.  The  liability  of  corporations  created  under 
this  act,  or  existing  under  the  laws  of  this  state,  or  the  stock- 
holders or  officers  thereof,  or  the  right  or  remedies  of  the 
creditors  thereof,  or  of  persons  doing  or  transacting  business 
with  such  corporation,  shall  not  in  any  way  be  lessened  or 
impaired  by  the  sale  thereof,  or  by  the  increase  or  decrease  in 
the  capital  stock  of  any  such  corporation,  or  by  the  consoli- 
dation of  two  or  more  corporations,  or  by  any  change  or 
amendment  in  the  articles  of  incorporation. 

AUTHORITY    OF    CONSOLIDATED     CORPORATION    TO    ISSUE 
BONDS  AND  STOCK. 

Section  59.  When  two  or  more  corporations  are  consol- 
idated, the  consolidated  corporation  shall  have  power  and 
authority  to  issue  bonds  or  other  obligations,  negotiable  or 
otherwise,  and  with  or  without  coupons  or  interest  certifi- 
cates thereto  attached,  to  an  amount  sufficient  with  its  capital 
stock  to  provide  for  all  the  payments  it  will  be  required  to 
make,  or  obligations  it  will  be  required  to  assume,  in  order 
to  effect  such  consolidation ;  to  secure  the  payment  of  which 
bonds  and  obligations  it  shall  be  lawful  to  mortgage  its  cor- 
porate franchise,  rights,  privileges  and  property,  real,  per- 
sonal and  mixed ;  and  may  issue  capital  stock,  to  such  an 
amount  as  may  be  necessary,  to  the  stockholders  of  such  con- 
solidated corporation  in  exchange  or  payment  for  the  original 
shares,  in  the  manner  and  on  the  terms  specified  in  the  agree- 
ment of  consolidation. 

Consolidated  company  may  mortgage  property  to  pay  off  debts  of  old 
companies  though  there  is  no  provision  in  consolidation  agreement  rela- 


CORPORATION    LAW    OF    DELAWARE.  7I 

tive  to  such  debts:    Camden,  etc.,  Co.  v.  Burlington  Carpet  Co.,  33  Atl. 
Rep.  479- 

SALE  OF  FRANCHISE. 

Section  6o.  If  the  franchise  and  property  of  any  corpora- 
tion formed  under  the  provision  of  this  act,  or  existing  under 
the  laws  of  this  state  is  sold,  the  persons  who  may  become 
the  purchasers,  at  private  sale  or  under  the  judgment  of  the 
court,  may  organize  a  corporation  for  the  continuation,  oper- 
ation and  management  of  the  same ;  and  such  corporation, 
when  organized,  shall  have  the  same  rights,  privileges  and 
franchises  as  have  been  granted  to,  or  acquired  by  the  cor- 
poration purchased;  and  shall  be  subject  to  all  the  limitations, 
restrictions  and  liabilities  imposed  upon  it ;  and,  in  addition 
thereto,  shall  be  subject  to  all  the  provisions  of  this  act. 
Such  corporation  shall  be  formed  by  articles  of  incorporation 
executed  by  the  purchaser  and  his  associates,  and  which  shall, 
in  addition  to  the  requirements  of  the  provisions  of  this  act, 
set  forth  the  description  of  the  property  sold  and  the  decree 
under  which  the  sale  was  made ;  if  it  was  sold  under  judgment, 
or  if  not,  the  deed  conveying  the  property ;  the  amount  paid 
or  to  be  paid,  and  to  whom  and  by  whom,  and  such  other 
statements  as  may  be  deemed  necessary.  The  article  shall 
be  signed  by  the  purchaser  and  his  associates,  if  any,  and  shall 
be  filed  in  the  of^fice  of  the  secretary  of  state,  who  shall  furnish 
a  certified  copy  of  the  same  under  his  hand  and  seal  of  office,. 
which  shall  be  recorded  as  hereinbefore  provided  for  certifi- 
cates of  incorporation ;  and  when  a  certificate  of  such  fact  is 
delivered  to  the  purchaser  the  corporation  shall  be  deemed 
to  be  organized,  and  shall  have  all  the  rights,  powers  and 
privileges,  and  be  subject  to  all  restrictions,  limitations  and 
liabilities  of  other  similar  corporations  organized  under  this 
act. 

Any  number  of  persons  may  purchase  the  property  for  themselves  and 
organize  a  new  corporation,  which  will  possess  all  the  powers,  rights, 
privileges  and  franchises  of  the  prior  corporation:  Vatable  v.  N.  Y., 
L.  E.  &  W.  R.  R.  Co.,  96  N.  Y.  49;  see  also  Pratt  v.  Munson,  84  N.  Y. 
582;  Thornton  -.'.  Wabash  Ry.  Co.,  81  N.  Y.  462. 


72  CORPORATION    LAW    OF    DELAWARE. 

PROVISIONS    RELATING   TO    SALES    OF    FRANCHISES. 

Section  6i.  Sales  of  the  property  and  franchises  of  such 
corporations  that  may  be  sold  under  a  decree  of  court  shall 
be  made  after  such  notice  of  the  time  and  place  as  the  court 
may  deem  proper;  and  if  such  sales  are  made  in  the  fore- 
closure of  one  or  more  mortgages,  the  court  may  order  such 
sale  to  be  made  for  the  whole  amount  of  the  outstanding 
bonds  and  interest  secured  by  such  mortgage  or  mortgages 
or  if  the  property  and  franchise  will  produce  so  much,  then 
for  the  amount  of  interest  due  under  said  mortgage  or  mort- 
gages, subject  to  the  payment  by  the  purchaser  of  the  out- 
standing bonds  and  interest  secured  thereby  as  they  become 
due ;  and  in  the  latter  event  may,  by  proper  orders,  secure 
the  assumption  thereof  by  the  purchaser ;  but  when  a  sale  shall 
be  ordered  to  be  made,  subject  as  aforesaid,  the  court  shall 
direct  the  officer  making  such  sale,  in  the  event  that  the 
property  and  franchises  offered  do  not  sell  for  enough  to  pay 
the  amount  aforesaid,  to  sell  the  same  free  from  incum- 
brances. Sales  under  this  section  shall  be  made  on  such 
credits  as  the  court  may  deem  proper. 

The  rights  of  each  of  the  stockholders  of  the  prior  corporation  will  be 
cut  ofif  by  the  foreclosure  and  sale.  The  only  property  interest  left  to 
him  is  in  the  surplus,  if  any,  after  satisfying  the  mortgage  and  other 
preferential  claims:   Vatable  v.  N.  Y.,  L.  E.  &  W.  R.  R.  Co.,  96  N.  Y.  49. 

When  the  plan  for  readjustment  of  interests  has  been  embodied  in  the 
certificate  filed  for  the  organization  of  the  new  corporation  it  constitutes 
notice  to  stockholders  of  the  general  features  of  such  plan:    lb. 

FORFEITURE    OF    CHARTER    FOR    FAILURE    TO    COMMENCE 

BUSINESS. 

Section  62.  Any  corporation  organized  under  this  act 
shall  forfeit  all  rights,  privileges  and  franchises  obtained  there- 
under, if  it  shall  fail,  for  two  years  after  its  organization,  to 
commence  in  good  faith  the  business,  or  to  promote  the  ob- 
jects or  purposes  for  which  it  was  organized. 
See  section  2.  subd.  7,  and  notes,  ante. 

This  section  and  sections  10,  11  and  12  of  an  Act  to  Raise 


CORPORATION    LAW    OF    DELAWARE.  y^ 

Revenue  (post),  are  the  only  provisions  of  the  legislature  for 
the  forfeiture  or  revocation  of  corporate  charters. 

For  the  abuse  or  misuse  of  corporate  powers,  privileges  or 
franchises,  or  even  the  non-user  thereof  after  once  having 
exercised  said  powers,  there  is  at  present  no  statute  providing 
for  the  revocation  or  forfeiture  of  corporate  charters. 

It  may  even  be  questioned  whether  charters  can  be  for- 
feited for  failure  of  a  corporation  to  begin  business  within  the 
stated  two  years,  since  the  mode  of  enforcing  this  section  is 
not  as  yet  prescribed  as  is  required  by  article  ix.  section  i,  of 
the  constitution. 

The  above  section  cannot  possibly  be  self-executing  under 
the  constitution. 

WANT  OF  LEGAL  ORGANIZATION  NO  DEFENCE  IN  ACTIONS. 

Section  63.  No  corporation  organized  under  this  act  or 
existing  under  the  laws  of  this  state,  shall  be  permitted  to 
set  up,  or  rely  upon  the  want  of  legal  organization  as  a  de- 
fence to  any  action  against  it ;  nor  shall  any  person  transact- 
ing business  with  such  corporation,  or  sued  for  injury  done  to 
its  property,  be  permitted  to  rely  upon  such  want  of  legal  or- 
ganization as  a  defence. 

This  section  shall  not  be  construed  to  prevent  judicial  in- 
quiry into  the  regularity  or  validity  of  the  organization  of  the 
corporation  or  its  lawful  possession  of  any  corporate  power 
it  may  undertake  to  assert  in  any  other  suit  or  proceeding 
where  its  corporate  existence  or  the  power  to  exercise  the 
corporate  rights  it  asserts  is  challenged,  and  evidence  tending 
to  sustain  such  challenge  shall  be  admissible  in  any  such  suit 
or  proceeding. 

See  also  section  12,  ante,  and  notes. 

The  effect  of  this  section  seems  to  be  to  prevent  a  collateral  inquiry! 
into  the   legality  of  corporate   organizations;   such   inquiry   can   only   be 
made  by  the  attorney-general  in  proceedings  instituted  especially  for  that 
purpose:    Stout  v.  Zulick,  48  N.  J.  Law,  599. 

In  an  action  for  goods  sold  to  a  corporation,  the  latter  cannot  show, 
under  a  general  denial,  that  it  was  not  incorporated  at  the  time  of  the 
sale  alleged:  Schmidt  v.  Nelke  Art  Lithographic  Co.,  17  Misc.  124;  re- 
versing 16  Misc.  300. 


74  CORPORATION    LAW    OF    DELAWARE. 

A  party  who  has  entered  into  a  contract  with  another,  in  which  the 
latter  assumes  to  be  and  contracts  as  a  corporation,  is  estopped  from 
denying  the  corporate  existence:  U.  S.  Vinegar  Co.  v.  Schlegel,  143. 
N.  Y.  537. 

An  indictment  for  the  larceny  of  the  property  of  a  corporation  need  not 
allege  that  it  was  a  corporation  of  the  state  at  the  time  of  the  alleged 
ofTense:    State  v.  Fitzpatrick  et  al.,  2^  Atl.  Rep.  1072. 

NAME   TO  BE   DISPLAYED   ON   PRINCIPAL   OFFICE. 

Section  64.  Every  corporation  organized  under  this  act, 
shall  in  a  conspicuous  place,  on  its  principal  place  or  places 
of  business,  in  letters  sufficiently  large  to  be  easily  read,  have 
painted  or  printed  the  corporate  name  of  such  corporation, 
and  immediately  under  the  same,  in  like  manner,  shall  be 
printed  or  painted  the  word  "Incorporated."  And  immedi- 
ately under  the  name  of  such  corporation,  upon  all  printed 
or  advertising  matter  used  by  such  corporation,  shall  appear 
in  letters  sufficiently  large  to  be  easily  read  the  word  "Incor- 
porated." And  such  corporation  which  shall  fail  or  refuse 
to  comply  with  the  provisions  of  this  section  shall  be  sub- 
ject to  a  fine  of  not  less  than  one  hundred  dollars,  and  not 
more  than  five  hundred  dollars,  to  be  recovered  with  costs  by 
the  state,  before  any  court  of  competent  jurisdiction,  by  action 
at  law  to  be  prosecuted  by  the  attorney-general. 

It  would  be  safer  to  follow  the  statute  literally  and  use  the 
word  "Incorporated,"  without  additions,  when  its  use  is  re- 
quired by  the  statute. 

ISSUING  NEW  CERTIFICATES  OF  STOCK  FOR  THOSE  LOST  OR 

DESTROYED. 

Section  65.  Every  corporation  organized  under  this  act, 
may  issue  a  new  certificate  of  stock  in  the  place  of  any  certifi- 
cate theretofore  issued  by  it,  alleged  to  have  been  lost  or  de- 
stroyed, and  the  directors  may,  in  their  discretion,  require  the 
owner  of  the  lost  or  destroyed  certificate,  or  his  legal  repre- 
sentatives, to  give  the  corporation  a  bond,  in  such  sum  as  they 
may  direct,  not  exceeding  double  the  value  of  the  stock,  to 
indemnify  the  corporation  against  any  claim   that  may  be 


CORPORATION    LAW    OF    DELAWARE.  75 

made  against  it  on  account  of  the  alleged  loss  of  any  such  cer- 
tificate ;  a  new  certificate  may  be  issued  without  requiring  any 
bond  when,  in  the  judgment  of  the  directors  it  is  proper  so 
to  do,  and  when  any  such  corporation  shall  have  refused  to 
issue  a  new  certificate  of  stock  in  place  of  one  theretofore  is- 
sued by  it,  or  by  any  corporation  of  which  it  is  the  lawful  suc- 
cessor, alleged  to  have  been  lost  or  destroyed,  the  owner  of 
the  lost  or  destroyed  certificate  or  his  legal  representatives, 
may  apply  to  the  superior  court  of  the  state  of  Delaware  in 
and  for  the  county  in  which  the  principal  of^ce  of  the  corpo- 
ration is  located  for  an  order  requiring  the  corporation  to 
show  cause  why  it  should  not  issue  a  new  certificate  of  stock 
in  place  of  the  one  so  lost  or  destroyed  ;  such  application  shall 
be  by  petition  duly  verified,  in  which  shall  be  stated  the  name 
of  the  corporation,  the  number  and  date  of  certificate,  if 
known  or  ascertainable  by  the  petitioner,  the  number  of 
shares  of  stock  named  therein  and  to  whom  issued,  and  a 
statement  of  the  circumstances  attending  such  loss  or  destruc- 
tion ;  thereupon  such  court  shall  make  an  order  requiring 
the  corporation  to  show  cause  at  a  time  and  place  therein 
mentioned,  why  it  should  not  issue  a  new  certificate  of  stock 
in  place  of  the  one  described  in  the  petition ;  a  copy  of  the 
petition  or  order  shall  be  served  upon  the  president  or  other 
head  ofTlicer  of  the  corporation,  or  on  the  cashier,  secretary, 
treasurer  or  any  director  thereof  personally  or  left  at  the  prin- 
cipal office  or  place  of  business  of  the  corporation  in  this  state 
at  least  five  days  before  the  time  designated  in  the  order. 

The  title  of  the  true  owner  of  a  lost  or  stolen  certificate  of  stock  may 
be  asserted  against  any  one  subsequently  obtaining  its  possession,  al- 
though the  holder  may  be  a  bona  fide  purchaser:  Knox  v.  Eden  Musee 
Co.,  148  N.  Y.  441. 

PROCEEDINGS  ON  LOSS  OR  DESTRUCTION  OF  CERTIFICATE. 

Section  66.  At  the  time  and  place  specified  in  the  order, 
and  on  proof  of  service  thereof,  the  court  shall  proceed  to  hear 
the  proofs  and  allegations  in  behalf  of  the  parties  in  interest, 


76  CORPORATION    LAW    OF    DELAWARE. 

relative  to  the  subject-matter  of  inquiry,  and  if  upon  such 
hearing-  the  court  shall  be  satisfied  that  the  petitioner  is  the 
lawful  owner  of  the  number  of  shares  of  capital  stock,  or  any 
part  thereof,  described  in  the  petition,  and  that  the  certificate 
therefor  has  been  lost  or  destroyed  and  cannot  be  found,  and 
no  sufficient  cause  has  been  shown  why  a  new  certificate 
should  not  be  issued  in  place  thereof,  it  shall  make  an  order 
requiring  the  corporation,  within  such  time  as  shall  be  therein 
designated,  to  issue  and  deliver  to  the  petitioner  a  new  cer- 
tificate for  the  number  of  shares  of  the  capital  stock  of  the 
corporation,  which  shall  be  specified  in  the  order  as  owned 
by  the  petitioner,  and  the  certificate  for  which  shall  have  been 
lost  or  destroyed ;  in  making  the  order  the  court  shall  direct 
that  the  petitioner  file  such  bond  in  such  form  and  with  such 
security  as  to  the  court  shall  appear  sufficient  to  indemnify 
any  person  who  shall  thereafter  appear  to  be  the  lawful  owner 
of  such  certificate  stated  to  be  lost  or  stolen ;  any  person  who 
shall  thereafter  claim  any  rights  under  the  certificate  so  lost 
or  destroyed,  shall  have  recourse  to  said  indemnity,  and  the 
corporation  shall  be  discharged  from  all  liability  to  such  per- 
son by  reason  of  compliance  with  the  order  of  court ;  and 
obedience  to  said  order  may  be  enforced  by  the  court  by  at- 
tachment against  the  offtcers  of  the  corporation,  on  proof  of 
their  refusal  to  comply  with  the  same. 

Trover  will  lie  for  a  corporate  certificate  of  stock  in  an  incorporated 
company,  if  the  absolute  ownership  of  the  property  is  in  the  plaintiff,  and 
he  has  an  unqualified  right  to  the  possession  of  it  when  demanded  of  and 
refused  by  the  defendant.  And  the  measure  of  the  damages  for  the  con- 
version of  it  will  be  the  value  of  the  shares  of  stock  represented  in  it  at 
the  time  of  such  demand  and  refusal:    Stewart  v.  Bright.  6  Houst.  344. 

DRAINAGE   AND   RECLAMATION    OF   LOW   LANDS. 

Section  67.  Every  corporation  organized  under  this  act, 
for  the  drainage  or  reclamation  of  low  lands,  shall,  in  ad- 
dition to  the  other  powers  conferred  by  this  act.  have  power, 
for  the  purpose  of  reclamation  of  low  lands  by  ditching, 
draining  and  bringing  them  into  cultivation,  to  enter  upon 


CORPORATION    LAW    OF    DELAWARE.  jy 

any  lands  that,  in  the  opinion  of  the  directors  or  managers, 
will  be  benefited  by  the  operations  to  be  performed  by  the 
corporation,  and  with  their  workmen,  laborers,  teams,  agents 
and  employes,  to  cut  and  make,  and  when  made,  from  time 
to  time,  to  clean  out,  remove  all  obstructions  and  thoroughly 
cleanse  all  such  ditches  or  drains  as  in  the  opinion  of  such 
directors  or  managers  shall  be  necessary  for  effectually  drain- 
ing and  reclaiming  the  said  lands.  Before  proceeding  to  ac- 
complish the  ends  of  its  incorporation,  the  said  corporation 
shall  apply  to  the  superior  court  of  the  state  of  Delaware,  in 
and  for  the  county  in  which  the  low  lands,  desired  to  be 
drained,  or  the  greater  part  thereof,  may  be  located,  for  the 
appointment  of  commissioners  to  go  upon  the  lands,  through, 
along  or  across  which  the  ditch  or  ditches  of  the  said  corpo- 
ration are  proposed  to  be  cut,  and  view  the  same  and  deter- 
mine whether  any  and  which  of  them  will  be  benefited  by  the 
same,  and  to  make  a  return  of  their  proceedings  in  the 
premises  to  the  said  superior  court,  with  a  survey  and  plot 
of  the  proposed  ditches,  showing  their  course,  and  the  lands. 
by  general  designation,  through,  along  and  across  which 
they  will  run  and  to  be  benefited  thereby  and  the  probable 
costs  of  making  the  improvements.  They  shall  also  return 
a  valuation  of  the  several  parcels  of  land  to  be  benefited  by 
such  improvements.  Should  there  be  upon  the  lines  of  the 
corporation's  works  any  lands  through,  along  and  across 
which  the  ditch  or  ditches  are  to  be  made  that  will  be  injured 
by  the  making  of  them,  they  shall  estimate  such  damage  in 
money  and  the  same  shall  be  paid  to  the  owner,  or,  in  case  of 
his  refusal  to  receive  it.  or  absence  from  the  state,  or  inability 
by  reason  of  legal  disability,  it  shall  be  deposited  to  his  credit 
in  the  Farmers'  Bank,  or  that  branch  thereof  at  the  county 
seat,  in  which  the  lands  are  located,  before  the  company  shall 
have  any  right  to  construct  or  make  their  works  through 
such  land. 

The  return  of  the  commissioners  upon  being  confirmed  by 
the  said  superior  court,  shall  be  final  and  conclusive  upon  all 


yS  CORPORATION    LAW    OF    DELAWARE. 

parties,  and  shall  be  the  basis  upon  which  the  taxes  of  the 
corporation  are  to  be  laid.  Said  return  of  the  commissioners, 
together  with  the  survey,  and  plot,  being  approved  by  the 
said  superior  court,  shall  be,  by  the  prothonotary,  forthwith 
delivered  to  the  recorder  of  deeds  of  the  county  in  which  the 
proceedings  are  instituted  to  be  by  him  recorded  in  a  book 
to  be  procured  for  the  purpose.  The  said  valuation  thus  ap- 
proved by  the  said  court  shall  continue  until  a  majority  of  the 
taxables  or  those  liable  to  pay  the  said  taxes  demand  a  new 
one,  proceedings  from  which  shall  be  taken  in  the  said  court 
by  petition,  and  the  prayer  of  the  petitioner  granted,  if  in  the 
opinion  of  the  court  such  new  valuation  is  proper  to  be  made 
at  the  time ;  and  said  new  valuation,  if  any  is  ordered  to  be 
made,  shall  be  returned  to  the  court,  and  being  approved, 
shall  be,  by  the  prothonotary,  forthwith  delivered  to  the  re- 
corder of  the  county,  to  be  by  him  recorded  in  the  same  man- 
ner as  is  provided  for  the  recording  of  the  original  proceed- 
ings. 

Exceptions  to  the  returns  of  commissioners  hereinbefore 
provided  for  may  be  made  by  any  person  aggrieved  thereby, 
and  said  exception  shall  be  heard  and  determined  under  such 
rules  and  regulations  as  the  court  shall  adopt  for  that  pur- 
pose. Before  any  commissioners  appointed  under  this  sec- 
tion proceed  to  act  they  shall  be  sworn  or  af^rmed  by  one 
of  their  own  members,  or  other  persons  authorized  by  law  to 
administer  oaths,  to  perform  the  duties  required  of  them  with 
fidelity,  which  qualification  must  be  certified  upon  their  re- 
turn. When  record  is  made  of  the  return,  together  with  the 
survey  and  plot,  where  the  survey  and  plot  is  a  part  of  the 
return,  the  original  shall  be  delivered  over  to  the  corporation, 
and  it  or  the  record  thereof,  or  any  certified  ofifice  copy  of  the 
latter  shall  be  evidence.  The  commissioners  shall  each  be 
paid  by  the  corporation  two  dollars  for  each  day  employed 
under  this  act.  and  the  surveyor,  for  his  survey  and  plot  (in- 
cluding a  fee  of  one  dollar  and  fifty  cents  each  day  to  the 
chain  carriers)  such  sum  as  the  commissioners  may  deem 


CORPORATION    LAW    OF    DELAWARE.  79 

just,  and  tax  the  same  upon  the  return ;  and  this  money  shall 
be  paid  before  the  commissioners  shall  be  required  to  make 
any  return.  The  fees  of  the  prothonotary  and  all  costs  in- 
curred in  any  and  all  proceedings  had  in  this  behalf  in  the 
superior  court,  shall  be  paid  to  the  prothonotary  by  the  cor- 
poration, before  he  shall  be  required  to  deliver  the  returns, 
surveys  and  plots  or  any  of  them  to  the  recorder  of  deeds  as 
hereinbefore  provided ;  and  the  fees  of  the  recorder  shall  also 
be  paid  to  him  at  the  time  of  the  delivery  to  him  of  the  said 
return,  survey  and  plot.  Whatever  money  the  corporation 
may  deem  necessary  to  raise  for  cutting  the  ditch  or  ditches 
(including  the  expenses  in  this  section  provided  for),  and  for 
keeping  the  same  open  and  in  repair,  shall  from  time  to  time, 
as  the  exigency  may  require,  be  collected  by  the  taxation  of 
the  taxables,  according  to  the  nature  of  their  property  to  be 
benefited ;  to  provide  for  which  the  managers  shall  make  an 
estimate  of  the  money  to  be  raised  and  apportion  it  among 
the  said  taxables ;  and  they  shall  at  once  give  notice,  under 
their  hands,  of  a  meeting,  of  said  taxables,  to  be  held  on  a 
day  therein  to  be  named,  and  at  some  convenient  place,  and 
between  ten  o'clock  of  the  forenoon  and  four  o'clock  of  the 
afternoon,  of  said  day,  to  consider  the  said  apportionment. 
At  said  meeting  any  taxable  shall  have  the  right  to  be  present 
and  object  to  the  justice  of  the  same  in  his  case.  The  man- 
ager shall,  at  the  close  of  the  meeting  (which  shall  be  kept 
open  at  least  three  hours),  reconsider  their  apportionment 
and  alter  the  same,  if  they  deem  it  just  and  expedient  so  to 
do.  Such  reconsideration  shall  be  final,  and  then  they  shall 
make  a  copy  of  the  apportionment  under  their  hands,  and 
deliver  the  same  to  the  treasurer;  and  when  the  company 
orders  money  to  be  collected  for  its  necessary  purposes,  the 
treasurer  shall,  upon  receiving  their  warrant  in  writing,  pro- 
ceed to  collect  the  same,  from  the  respective  taxables,  accord- 
ing to  such  apportionment,  and  for  that  purpose  shall  have 
all  the  powers  of  a  collector  of  county  taxes.  The  apportion- 
ment shall  continue  until  a  new  apportionment  shall  be  made 


80  CORPORATION    LAW    OF    DELAWARE. 

by  the  managers  and  approved  at  a  meeting  of  taxables^ 
called  for  the  consideration  thereof,  which  meeting  shall  be 
called  in  the  same  manner  and  kept  open  for  the  same  time 
as  is  provided  for  the  first  apportionment,  and  made  after  the 
managers  shall  have  reconsidered  their  apportionment  and 
altered  the  same,  if  they  shall  deem  it  expedient  so  to  do,  and 
taxes  may,  from  time  to  time,  be  collected,  according  to  it, 
as  the  needs  of  the  company  may  require.  Orders  for  col- 
lections, however,  shall  only  be  valid  when  made  by  the  cor- 
poration at  an  annual  meeting. 

In  case  of  private  owners  of  a  ditch  or  ditches  not  within 
the  corporation's  limits,  but  the  waters  collected  in  which 
can  be  discharged  into  the  ditches  of  the  corporation,  such 
private  owners  may  be  allowed  to  connect  with  the  ditch  or 
ditches  of  the  corporation  on  such  terms  as  may  be  agreed 
upon,  and  may  thenceforth  become  constituent  members  of 
the  corporation,  with  the  rights  of  such  members,  and  subject 
as  to  themselves  and  their  lands^  drained  by  such  private  ditch 
or  ditches,  to  all  the  burdens  and  responsibilities  of  other 
members  of  the  corporation  ;  and  the  managers  shall,  at  once, 
add  their  lands  to  the  other  lands  within  the  corporation's 
operations,  and  apportion  their  share  of  the  taxes  among 
them  as  above  provided  with  respect  to  original  taxables. 
The  managers  shall  take  account  of  all  changes  of  owner- 
ship of  lands  within  the  corporation's  limits  from  whatever 
cause,  and  substitute  the  names  of  the  new  owners  or  taxables 
in  lieu  of  the  old  ones  upon  their  original  apportionment, 
from  which  they  shall  be  transferred  to  the  copy  in  the  hands 
of  the  treasurer,  and  when  transferred  the  new  taxables  shall 
stand  in  the  place  of  the  old,  in  all  respects  as  if  they  had 
been  original  owners  or  taxables.  Such  corporations  as  are 
provided  for  in  this  section  shall  set  forth  the  name  of  the 
hundred  or  hundreds  in  which  their  operations  are  to  extend, 
in  the  certificate  of  their  incorporation.  All  the  provisions  of 
section  7,  chapter  59,  Revised  Code,  as  amended,  etc.,  A.  D. 
1893,  shall  be  applicable  to  all  corporations  created  under  the 


CORPORATION    LAW    OF    DELAWARE.  8l 

provisions  of  this  act  for  the  drainage  or  reclamation  of  low 
lands. 

BUILDING  AND  LOAN  ASSOCIATIONS. 

Section  68.  Building  and  loan  associations  organized 
under  this  act  shall,  in  addition  to  the  other  powers  herein 
granted,  have  power  to  sell  their  accumulated  funds  to  and 
among  their  stockholders  at  any  premium  which  may  be  ob- 
tained for  the  same,  and  when  such  funds  cannot  be  loaned  to 
any  stockholder  at  par  they  may  be  loaned  to  any  person  not 
a  stockholder  at  any  rate  of  interest  not  exceeding  six  per 
cent. 

RAILROADS.     FORMATION. 

Section  69.  Any  number  of  persons,  not  less  than  nine, 
may  form  a  corporation  under  the  provisions  of  this  act, 
which  corporation  so  formed  as  aforesaid  shall  have  perpetual 
succession,  for  the  purpose  of  constructing,  maintaining  and 
operating  a  railroad  for  the  transportation  of  freight  and  pas- 
sengers, and  shall  do  and  perform  the  several  matters  and 
things  hereinafter  stated,  and  shall  have  and  exercise  all  the 
rights,  powers  and  privileges  hereinbefore  and  hereafter  con- 
ferred and  be  subject  to  all  the  duties,  limitations,  restrictions 
and  liabilities  hereinafter  imposed  upon  such  corporation ;  and 
for  that  purpose  may  make  and  sign  articles  of  association 
in  lieu  of  the  articles  of  association  hereinbefore  required  by 
the  provisions  of  this  act,  in  which  shall  be  stated : 

1.  The  name  of  the  corporation. 

2.  The  place  from  which  and  to  which  such  railroad  is  to 
be  constructed,  maintained  and  operated. 

3.  The  estimated  length  of  such  railroad,  and  the  name  of 
each  county  in  this  state  through  or  into  which  it  is  intended 
to  be  made. 

4.  The  amount  of  the  capital  stock  of  the  corporation, 
which  shall  not  be  less  than  five  thousand  dollars  for  every 
mile  of  road  proposed  to  be  constructed. 

5.  The  number  of  shares  of  which  said  capital  stock  shall 

consist. 
6 


82  CORPORATION    LAW    OF    DELAWARE. 

6.  The  names  and  places  of  residence  of  nine  directors  of 
the  corporation,  who  shall  manage  its  affairs  for  the  first  year 
and  until  others  are  chosen  in  their  places;  and  each  such  per- 
son shall  subscribe  thereto  his  name,  place  of  residence  and 
the  number  of  shares  of  stock  he  agrees  to  take  in  such  cor- 
poration ;  at  least  one  of  said  directors  shall  be  a  resident  of 
this  state. 

7.  The  name  of  the  city,  town,  county  or  place  within  the 
county  in  this  state  in  which  its  principal  office  or  place  of 
business  will  be  located  in  this  state. 

APPROVAL    OF   JUDGE,    FILING,    ETC. 

Section  70.  Said  articles  of  association  shall  be  presented 
to  one  of  the  judges  of  the  superior  court  of  the  state  of  Dela- 
ware, who  shall  examine  the  same,  and  if  found  to  conform 
to  the  requirements  of  this  act,  shall  endorse  his  certificate 
thereon  accordingly.  On  compliance  with  the  foregoing 
provisions  and  the  requirements  of  the  next  succeeding  sec- 
tion, which  latter  shall  be  evidenced  by  the  receipt  of  the 
state  treasurer  delivered  to  the  secretary  of  state,  such  arti- 
cles of  association  may  be  filed  in  the  office  of  the  secretary 
of  state,  who  shall  endorse  thereon  in  writing  the  day  they 
are  filed,  and  record  the  same  in  a  book  to  be  provided  by  him 
for  that  purpose ;  and  upon  tendering  the  said  articles  to  the 
secretary  of  state  to  be  filed,  the  persons  who  have  so  sub- 
scribed such  articles  of  incorporation  and  all  persons  who 
shall  become  stockholders  in  such  corporation,  shall  be  a  cor- 
poration by  the  name  specified  therein ;  every  such  corpora- 
tion formed  under  this  act.  in  addition  to  the  general  powers 
hereinbefore  in  this  act  set  forth  shall  have  power: 

ADDITIONAL  POWERS. 

I.  To  have  authority,  by  its  officers  and  servants,  to  enter 
upon  the  lands  or  waters  of  any  person  or  persons,  which 
may  be  necessary,  to  make  such  examination  and  surveys  for 
its  proposed  railroad  as  shall  be  required  to  be  made,  in  the 


CORPORATION    LAW    0¥    DELAWARE.  83 

selection  of  the  most  advantageous  route,  but  subject  at  all 
times  to  responsibility  for  all  and  any  damage  which  shall  be 
done  to  the  property  of  any  such  person  or  persons. 

2.  To  aid  in  the  construction,  maintenance  and  accommo- 
dation of  its  railroad,  may  take  and  hold  such  voluntary 
grants  of  real  estate  and  other  property  as  shall  be  made  to  it, 
but  in  all  instances,  the  real  estate  received  as  a  voluntary 
grant  shall  be  held  and  used  for  the  purpose  of  such  grant 
only. 

3.  For  the  sole  purpose  of  the  construction  and  mainte- 
nance of  its  railroad,  and  the  stations  and  other  accommoda- 
tions necessary  to  accomplish  the  object  of  its  incorporation, 
it  may  purchase,  hold  and  use  all  such  real  estate  or  other 
property  as  may  be  necessary. 

4.  To  construct  its  road  and  lay  out  the  same  as  herein  pro- 
vided and  for  the  purpose  of  cuttings  and  embankments,  to 
take  as  much  more  land  as  may  be  necessary  or  required,  for 
the  proper  construction  and  security  of  the  road. 

5.  To  use  and  exercise  all  other  rights  and  powers  herein 
granted. 

REQUIRED  CAPITAL  STOCK. 

Section  71.  Articles  of  association,  in  compliance  with  the 
provisions  of  sections  69  and  70  of  this  act.  shall  not  be  filed 
and  recorded  in  the  office  of  the  secretary  of  state  until  at 
least  two  thousand  dollars  of  stock  for  every  mile  of  railroad 
proposed  to  be  made  is  subscribed  thereto  and  paid,  in  good 
faith  and  in  cash,  to  the  directors  named  in  said  articles  of 
association,  nor  until  the  said  directors  shall  have  deposited 
the  said  money  so  subscribed  and  paid  to  them  with  the  state 
treasurer,  who  is  constituted  the  custodian  of  the  same,  and 
shall  hold  the  same.  snl)ject  to  be  repaid  to  the  directors  of 
the  said  corporation,  or  to  the  treasurer  thereof,  in  sums  of 
two  thousand  dollars  for  each  mile  of  said  railroad,  upon  the 
construction  of  which  it  shall  be  proved  to  his  satisfaction, 
that  the  said  corporation  has  expended  at  least  the  sum  of 


84  CORPORATION    LAW    OF    DELAWARE. 

two  thousand  dollars,  nor  until  there  is  endorsed  on  such  ar- 
ticles of  association,  or  annexed  thereto,  an  affidavit,  made 
by  at  least  five  of  the  directors  named  in  said  articles  of  asso- 
ciation, that  the  amount  of  stock  required  by  this  section  has 
been,  in  good  faith,  subscribed  and  paid  in  cash  as  aforesaid, 
and  that  it  is  intended  in  good  faith,  to  construct  or  maintain 
and  operate  the  road  mentioned  in  such  articles  of  associa- 
tion, which  affidavit  shall  be  recorded  with  the  articles  of 
association  as  aforesaid. 

COPY   OF   CHARTER,   EVIDENCE,   ETC. 

Section  ^2.  That  a  copy  of  any  articles  of  association  for 
the  construction  and  operation  of  railroads,  filed  and  recorded 
in  pursuance  of  provisions  of  this  act,  or  of  the  record  thereof, 
with  a  copy  of  the  affidavit  aforesaid  indorsed  thereon  or  an- 
nexed thereto  and  duly  certified  to  be  a  copy  by  the  secre- 
tary of  state,  shall  be  presumptive  evidence  of  the  in- 
corporation of  such  corporation  and  of  the  facts  therein 
stated. 

Nothing  in  this  section  contained  shall  prevent  judicial  in- 
quiry into,  and  ascertainment  of  the  existence  of  the  corpora- 
tion or  the  possession  of  the  corporate  powers  it  undertakes 
to  assert  in  any  suit  or  proceeding  wherein  the  same  shall  be 
challenged. 

SUBSCRIBING  STOCK,  TEN  PER  CENT.   ON,  REQUIRED  PAID. 

Section  y^i-  The  directors  named  in  said  articles  of  asso- 
ciation may,  when  such  articles  of  association  and  affidavit 
are  filed  and  recorded  in  the  office  of  the  secretary  of  state,  in 
case  the  whole  of  the  capital  stock  is  not  before  subscribed, 
continue  to  receive  subscriptions  until  the  whole  capital  stock 
is  subscribed ;  at  the  time  of  subscribing  every  subscriber  shall 
pay  to  the  directors  ten  per  centum  on  the  amount  subscribed 
by  him,  in  money,  and  no  subscription  shall  be  received  or 
taken  without  such  payment. 


CORPORATION    LAW    OF    DELAWARE.  85 

DIRECTORS. 

Section  74.  That  there  shall  be  a  board  of  not  less  than 
nine  directors  of  every  corporation  formed  under  this  act  for 
the  purpose  of  constructing  and  operating  a  railroad  or  rail- 
roads, to  manage  its  affairs;  said  directors  shall  be  chosen 
annually  by  a  majority  of  the  votes  of  the  stockholders  at  such 
elections,  and  in  such  manner  as  may  be  prescribed  in  the 
by-laws  of  the  corporation,  and  they  may  and  shall  continue 
to  be  directors  until  others  are  elected  and  qualified  in  their 
places;  in  the  election  of  directors  each  stockholder  shall  be 
entitled  to  one  vote  for  each  share  of  stock  held  by  him; 
vacancies  in  the  board  of  directors  shall  be  filled  in  such  man- 
ner as  shall  be  prescribed  by  the  by-laws  of  the  corporation ; 
the  inspectors  to  hold  the  first  election  of  directors  shall  be 
appointed  by  the  board  of  directors  named  in  the  articles  of 
association ;  no  person  shall  be  a  director  unless  he  shall  be 
a  stockholder,  owning  stock  absolutely  in  his  own  right,  and 
qualified  to  vote  for  directors  at  the  election  at  which  he  shall 
be  chosen ;  at  every  election  of  directors  the  books  and  papers 
of  such  company  shall  be  exhibited  to  the  meeting  and  sub- 
ject to  the  inspection  of  those  present,  provided  a  majority 
of  the  stockholders  present  shall  require  it. 

ORGANIZATION. 

Section  75.  That  within  thirty  days  after  the  articles  of 
association  are  filed  in  the  olifice  of  the  secretary  of  state  the 
directors  therein  named  shall  organize  by  the  election  of  one 
of  their  number  president ;  they  may  also  elect  a  treasurer  and 
secretary  and  adopt  such  by-laws  as  may  appear  to  be  proper 
and  right  for  the  government  of  the  corporation. 

INCREASE  OF  CAPITAL  STOCK. 

Section  76.  That  in  case  the  capital  stock  of  any  com- 
pany formed  under  this  act,  is  found  to  be  insufficient  for  con- 
structing and  operating  its  road,  such  company  may,  with 
the  concurrence  of  two-thirds  in  amount  of  all  its  stockhold- 


86  CORPORATION    LAW    OF    DELAWARE. 

ers,  increase  its  capital  stock  from  time  to  time,  to  any  amount 
required  for  the  purpose  of  constructing,  maintaining  and 
operating  its  railroad ;  such  increase  may  be  sanctioned  by  a 
vote  in  person  or  by  proxy,  of  two-thirds  in  amount  of  all 
the  stockholders  of  the  company,  at  a  meeting  of  such  stock- 
holders called  by  the  directors  of  the  company  for  that  pur- 
pose, by  a  notice  in  writing  to  each  stockholder  to  be  served 
on  him  personally,  or  by  depositing  the  same,  directed  to 
him,  in  the  post-office  nearest  his  usual  place  of  residence,  at 
least  twenty  days  prior  to  such  meeting;  such  notice  must 
state  time  and  place  of  meeting,  and  its  object  and  the  amount 
to  which  it  is  proposed  to  increase  the  capital  stock ;  the  pro- 
ceedings of  such  meeting  must  be  entered  on  the  minutes  of 
the  corporation,  and  thereupon  the  capital  stock  of  the  cor- 
poration may  be  increased  to  the  amount  sanctioned  by  a 
vote  of  two-thirds  in  amount  of  all  stockholders  of  the  corpo- 
ration as  aforesaid. 

Section  jy.  That  the  stock  of  every  company  formed 
under  this  act  shall  be  deemed  personal  estate  and  be  trans- 
ferable in  the  manner  prescribed  by  the  by-laws  of  the  com- 
pany, but  no  shares  shall  be  transferable  until  all  previous 
calls  thereon  shall  have  been  paid. 

ASSESSMENT  OF  DAMAGES,  CONDEMNATION  PROCEEDINGS. 

Section  78.  That  whenever  any  corporation  created  under 
this  act  cannot  agree  with  the  owner  or  owners  of  any  land, 
sand,  earth,  gravel  or  other  materials  necessar\'  to  be  taken 
and  used  in  the  construction  of  the  said  railroad,  for  the  pur- 
chase thereof,  the  said  corporation  may  apply  to  the  associate 
judge  of  the  state  of  Delaware,  resident  in  the  county  where 
the  land  and  materials  necessary  to  be  taken  are  located,  first 
giving  the  other  party  or  owner  at  least  five  days'  notice  in 
writing  of  the  intended  application  if  within  the  state :  and 
if  said  other  party  or  owner  be  unknown  or  without  the  state, 
then  such  notice  shall  be  published  in  some  newspaper  in  the 
county  in  which  the  land  proposed  to  be  taken  is  located,  at 


CORPORATION    LAW    OF    DELAWARE.  87 

least  five  days  prior  to  the  intended  application,  and  the  said 
associate  judge  shall  appoint  five  judicious  and  impartial 
freeholders,  to  view  the  premises  and  assess  the  damages 
which  the  owner  or  owners  will  sustain  by  reason  of  the  said 
railroad  passing  through,  taking  and  using  the  same.  The 
said  freeholders  shall  be  sworn  or  alarmed  before  some  judge, 
justice  of  the  peace  or  notary  public,  before  entering  on  the 
premises,  faithfully  and  impartially  to  perform  the  duties  as- 
signed them.  They  shall  give  ten  days'  notice,  in  writing, 
to  the  owner  or  owners  of  the  premises  or  to  their  guardian 
or  guardians,  duly  appointed  according  to  law,  if  within  the 
state  and  the  same  to  the  president  of  the  corporation  of  the 
time  of  their  meeting  to  viev^^  the  premises ;  and  the  said  com- 
missioners shall  certify  their  finding  and  award  to  both  par- 
ties, but  if  either  party  is  dissatisfied  with  the  damages  so 
assessed,  such  party  may  on  application  to  the  prothonotary 
of  the  superior  court  of  the  state  of  Delaware,  in  and  for  the 
county  where  the  land  lies,  within  thirty  days  after  such  as- 
sessment, sue  out  a  writ  of  ad  quod  damnum,  requiring  the 
sheriff  in  the  usual  form  to  inquire  of  twelve  impartial  men 
of  his  bailiwick  of  the  damages  as  aforesaid,  and  their  report 
shall  be  final ;  the  said  commissioners  shall  in  assessing  the 
damages  as  aforesaid,  award  at  least  the  actual  cash  value  of 
the  land,  sand,  earth,  gravel  or  other  materials  so  to  be  taken 
and  used,  as  aforesaid,  whereupon  the  corporation,  upon  pay- 
ing the  damages  so  assessed,  shall  become  entitled  to  have, 
hold,  use  and  enjoy  the  said  lands  and  materials  for  the  pur- 
poses by  them  required,  forever;  and  in  case  any  owner  of 
lands  necessary  and  taken  for  the  purpose  of  construction  of 
the  said  railroad,  shall  be  a  minor  or  a  non-resident,  or  for 
any  cause  incapable  of  receiving,  or  unwilling  or  neglecting 
to  receive  said  damages,  or  to  call  upon  the  said  corporation, 
for  the  same,  the  said  corporation  may  deposit  the  amount  of 
the  said  damages  to  the  credit  of  such  owner  or  owners,  in 
the  Farmers'  Bank  in  the  county  in  which  the  said  land  and 
materials  taken  are  located,  subject  to  his,  her  or  their  order 


88  CORPORATION    LAW    OF    DELAWARE. 

whereupon  the  said  corporation  shall  be  entitled  to  have, 
hold,  use  and  enjoy  the  said  lands,  premises  and  materials 
described  and  condemned  in  said  report  and  required  for  the 
purposes  of  said  corporation,  for  or  on  account  of  which  said 
damages  shall  have  been  so  assessed ;  the  expenses  of  the  as- 
sessment by  the  said  commissioners  of  the  damages  aforesaid 
and  the  fees  of  the  said  sheriff,  prothonotary  and  all  costs  in- 
curred in  the  execution  of  the  writ  of  ad  quod  damnum,  shall 
in  all  cases  be  paid  by  the  corporation. 

WIDTH,   SURVEYS,   ETC. 

Section  79.  That  any  railroad  constructed  under  the  pro- 
visions of  this  act  shall  not  exceed  sixty-six  feet  in  width  un- 
less more  land  shall  be  required  for  the  slopes  of  cuts  and 
embankments,  with  as  many  sets  of  tracks  and  rails  as  such 
corporation  may  deem  necessary,  and  it  shall  be  lawful  for 
such  corporation,  its  agents,  engineers,  superintendents,  or 
others  in  its  employ  to  enter  at  all  times  upon  all  lands  or 
waters  for  the  purpose  of  exploring,  surveying,  leveling  and 
laying  out  the  route  or  routes  of  such  railroad,  and  of  locating 
the  same,  and  all  necessary  works,  buildings,  conveniences, 
appurtenances  and  appendages  thereof,  doing  no  unnecessary 
injury  to  private  or  other  property;  and  when  the  route  or 
routes  of  such  railroad  and  the  location  or  locations  of  all 
other  works,  buildings,  conveniences,  appurtenances  and  ap- 
pendages thereof,  shall  have  been  determined  upon,  and  a 
survey  of  such  route  or  routes,  location  or  locations  deposited 
in  the  office  of  the  secretary  of  state,  then  it  shall  be  lawful 
for  every  such  corporation  formed  under  this  act,  upon  pay- 
ment or  tender  of  such  compensation  as  hereinbefore  pro- 
vided, by  the  officers,  agents,  engineers,  superintendents, 
workmen  and  other  persons  in  their  employ,  to  construct, 
maintain  and  operate  a  railroad  with  a  single  or  double  track, 
with  such  side  tracks,  turnouts,  offices,  stations  and  depots 
as  they  may  deem  necessary  at  and  between  the  points  named 
in  the  articles  of  association,  commencing-  at  or  within  and 


CORPORATION    LAW    OF    DELAWARE.  89 

extending  to  or  into  any  town,  city  or  village  named  as  the 
place  of  terminus,  and  from  time  to  time,  either  before  or 
after  completion  of  the  main  line,  construct,  maintain  and 
operate  branches  within  the  limits  of  any  county  through 
which  said  road  may  pass,  lay  rails,  and  for  that  purpose  to 
enter  upon,  take  possession  of,  hold,  have,  use,  occupy  and 
excavate  any  lands,  and  erect  any  embankments,  bridges  and 
all  other  necessary  works,  and  to  do  all  other  things  which 
may  be  suitable  or  necessary  for  the  completion,  repairs  or 
management  of  said  railroad,  and  for  the  conveyance  of  pas- 
sengers and  freight  to  and  from  the  termini  thereof  by  steam 
power ;  provided,  always,  that  the  payment  or  tender  of  pay- 
ment of  all  damages  for  the  occupancy  of  all  lands  through, 
under  or  upon  which  said  railroad  and  its  conveniences,  ap- 
purtenances and  appendages  may  be  laid  out  or  located,  be 
made  before  the  said  corporation,  or  any  person  under  its 
direction  or  employ  shall  enter  upon  or  break  ground  in  the 
premises,  except  for  the  purpose  of  surveying  and  laying  out 
said  railroad  and  its  conveniences,  appurtenances  and  ap- 
pendages and  of  locating  the  same,  unless  the  consent  of  the 
owner  or  owners  of  such  lands  be  first  had  and  obtained ;  and 
provided  further,  that  the  survey  of  the  route  of  any  branch 
shall  not  be  filed  in  the  ofifice  of  the  secretary  of  state  until 
the  officers  or  directors  of  the  corporation  shall  have  depos- 
ited with  the  state  treasurer  a  sum  equal  to  at  least  two 
thousand  dollars  for  every  mile  and  a  proportionate  sum  for 
any  distance  less  than  a  mile,  of  such  branch  which  it  is  pro- 
posed to  construct,  and  the  said  treasurer  shall  be  custodian 
of  such  fund,  and  shall  hold  the  same,  subject  to  be  repaid  to 
the  directors  or  treasurer  of  such  company  in  sums  of  two 
thousand  dollars  for  each  mile  and  a  proportionte  sum  for 
any  distance  less  than  a  mile,  of  such  branch  upon  the  con- 
struction of  which  it  shall  be  proved  to  his  satisfaction  that 
such  amount  has  been  expended;  and  provided  further,  that 
the  construction  of  all  such  branches  shall  be  commenced 
within  six  months  from  the  date  of  filing  the  survey  thereof 


90  CORPORATION    LAW    OF    DELAWARE. 

as  aforesaid  and  shall  be  completed  and  opened  within  three 
years  from  the  date  of  the  commencement  of  the  construction 
as  aforesaid. 

BRIDGES,  PASSAGES,  ETC. 

Section  8o.  It  shall  be  the  duty  of  every  railroad  corpora- 
tion organized  under  this  act  to  construct  and  keep  in  repair 
good  and  sufftcient  bridges  and  passages  over,  under  or 
across  the  said  railroad  or  right  of  way  where  any  public  or 
other  road,  street  or  avenue,  now  or  hereafter  laid  shall  cross 
the  same,  so  that  public  travel  on  the  said  road  shall  not  be 
impeded  thereby ;  and  it  is  further  provided,  that  such  bridges 
and  passages  shall  be  of  such  width  and  character  as  shall  be 
suitable  to  the  locality  in  which  the  same  are  situated ;  and 
also  where  the  said  road  shall  intersect  any  farm  or  lands  of 
any  individual,  to  provide  and  keep  in  repair  suitable  and  con- 
venient wagonways,  over,  under  or  across  the  said  railroad, 
and  shall  also  construct  and  maintain  suitable  and  proper  cat- 
tleguards  at  all  road  crossings ;  provided,  always,  that  in  case 
any  such  railroad  shall  cross  any  street  or  streets,  highway 
or  hip-hways,  in  any  city  or  incorporated  town,  it  shall  be 
either  above  or  below  the  grade  of  said  street  or  streets,  high- 
way or  highways,  at  such  distance  as  shall  not  interfere  with 
the  free  and  uninterrupted  use  of  such  street  or  streets,  high- 
way or  highways ;  provided,  further,  that  the  council  of  any 
city  or  the  commissioners  of  any  incorporated  town,  or  other 
persons  having  control  over  such  street  or  streets,  highway 
or  highways,  may  grant  permission  to  said  corporation  to 
cross  such  street  or  streets,  highway  or  highways  within  the 
limits  of  the  respective  city  or  incorporated  town  at  grade,  if 
they  deem  it  to  be  for  the  best  interest  of  the  city  or  incor- 
porated town ;  and  further  provided,  that  in  the  event  that 
such  corporation  shall  not,  within  a  reasonable  time  after  no- 
tification from  the  council  of  the  city  or  commissioners  of  the 
incorporated  town  or  other  persons  having  control  over  such 
street  or  streets,  highway  or  highways,  in  which  such  bridges 


CORPORATION    LAW    OF    DELAWARE.  9I 

and  passages  are  to  be  so  constructed,  or  repaired,  proceed 
to  construct  or  repair  the  same  as  required  by  this  act,  the 
said  council  or  commissioners  or  other  persons  aforesaid  may. 
in  the  corporate  name  of  such  city  or  town,  institute  pro- 
ceedings in  the  court  of  chancery  against  such  corporation 
to  compel  the  specific  performance  of  the  duties  imposed 
upon  such  corporation  by  this  section  of  this  act,  and  in  case 
a  decree  shall  be  made  against  such  corporation  in  said  pro- 
ceedings, commanding  it  to  specifically  perform  said  duties, 
within  a  reasonable  time  to  be  fixed,  and  if  such  corporation 
shall  neglect  or  refuse  to  specifically  perform  such  duties 
within  such  time,  the  chancellor,  upon  proof  of  such  neglect 
or  refusal,  may,  in  his  discretion,  issue  a  writ  of  injunction  to 
restrain  said  corporation  from  the  exercise  of  any  franchise  or 
the  transaction  of  any  business  in  this  state  until  said  corpo- 
ration shall  have  obeyed  the  command  of  said  decree  and 
shall  have  paid  the  costs  of  said  proceedings,  including  a 
reasonable  allowance  to  the  solicitor  of  stich  city  or  town,  to 
be  fixed  by  the  chancellor ;  and  further  provided,  that  said 
council  or  commissioners  or  other  persons  aforesaid,  in  the 
event  of  the  failure  of  such  corporation  to  construct  or  repair 
such  bridges  or  passages  within  a  reasonable  time  after  no- 
tification as  aforesaid,  may,  if  they  deem  it  advisable  so  to 
do,  proceed  themselves  to  construct  or  repair  such  bridges 
or  passages,  and  when  the  costs  thereof  shall  have  been 
ascertained,  the  same  may  be  collected  of  and  from  said  cor- 
poration by  said  council  or  commissioners  or  other  persons 
aforesaid  by  an  action  at  law  in  any  court  of  competent  juris- 
diction ;  provided  further,  that  the  permission  of  the  council 
of  any  city,  of  the  commissioners  of  any  incorporated  town 
or  other  persons  hereinbefore  referred  to,  shall  not  be  neces- 
sary for  the  purpose  of  crossing  any  street  or  streets,  high- 
way or  highways,  at  grade,  unless  said  street  or  streets,  high- 
v</ay  or  highways,  at  the  point  where  said  railroad  shall  cross, 
or  at  some  point  between  the  crossing  of  said  railroad  and 
the  nearest  terminus  of  said  street  or  streets,   highway  or 


92  CORPORATION    LAW    OF    DELAWARE. 

highways,  shall  be  in  actual  use  by  and  for  pedestrians  and 
teams  at  the  time  of  acquirement  of  the  right  of  way  of  said 
railroad  across  such  street  or  streets,  highway  or  highways. 

CROSSINGS,  SWITCHES,  SIGNALS,  ETC. 

Section  8i.  That  any  railroad  corporation  created  under 
this  act  which  shall  have  been  duly  located  the  route  of  its 
railroad  by  a  survey  deposited  in  the  office  of  the  secretary 
of  state,  as  rec[uired  by  section  79,  shall  have  power  in  the 
construction  of  its  said  railroad  on  such  route,  to  cross  any 
canal,  navigable  stream  or  water-course  between  its  termini, 
but  in  such  manner  as  not  unnecessarily  to  impede  the  navi- 
gation and  use  thereof;  and  shall  also  have  power  to  cross 
any  railroad  or  railway  intervening  between  such  termini  and 
acquire  the  necessary  easement  for  such  crossing  either  by 
agreement  with  the  corporation  owner  thereof  or.  on  failure 
to  agree,  by  condemnation  proceedings  in  the  manner  pre- 
scribed by  section  78.  Provided,  however,  that  whenever 
practicable  so  to  do.  the  crossing  at  grade  of  any  railroad  or 
railway  shall  be  avoided,  but  if  not  practicable,  the  crossing- 
may  be  at  grade,  subject  to  the  further  provisions  made  by 
this  section,  and  in  that  event  it  shall  be  the  duty  of  the  cor- 
poration whose  railroad  track  or  tracks  shall  cross  the  track 
or  tracks  of  such  other  railroad  or  railway  company,  at  its 
own  expense  to  erect  and  maintain  at  such  crossing  a  signal 
tower  and  signals  of  a  generally  approved  pattern  with  an 
electric  warning  attachment,  and  also  to  maintain  an  inter- 
locking system  with  derailing  switches,  and  keep  a  competent 
watchman  and  switchman  on  duty  thereat:  and  the  trains  of 
the  crossing  company  shall  come  to  a  full  stop  at  least  two 
hundred  feet  from  the  tracks  of  the  railroad  or  railway 
crossed ;  and  the  trains  or  cars  of  the  company  owning  or 
operating  the  railroad  or  railways  so  crossed  at  grade  shall 
have  precedence  and  priority  of  movement  over  the  trains  of 
the  company  constructing  the  crossing.  And  provided 
further,  that  no  such  grade  crossing  shall  be  permitted  or 


•     CORPOKATIOJM    LAW    OF    DELAWARE.  93 

effected  until  the  question  of  the  practicability  of  an  overhead 
or  undergrade  crossing  shall  have  been  considered  and  de- 
termined by  the  chancellor,  who  shall  upon  the  petition  or  bill 
of  the  company  desiring  to  effect  such  crossing  at  grade,  have 
full  power  and  jurisdiction  upon  notice  to  and  answer  by  the 
company  whose  tracks  are  proposed  to  be  crossed,  to  hear 
and  determine  the  matter  by  an  appropriate  decree,  either 
refusing  or  permitting  the  crossing  at  grade,  and  if  permitted 
to  prescribe  and  regulate  by  such  decree  the  manner  and 
character  of  the  said  crossing,  together  with  such  safeguards 
against  collisions  thereat,  in  addition  to  those  by  this  section 
provided  as  he  may  deem  proper;  with  the  right  of  appeal 
from  the  chancellor's  decree  to  the  supreme  court  by  either 
party,  as  in  other  cases  in  equity. 

LIMITATION  FOR   COMMENCEMENT   AND   COMPLETION. 

Section  82.  That  any  corporation  created  under  this  act 
for  the  purpose  of  constructing  a  railroad,  shall  commence 
the  proposed  construction  within  six  months  from  the  date 
of  its  organization,  and  complete  at  least  one  track  of  said 
road  within  three  years  from  the  date  of  the  commencement, 
as  aforesaid;  provided,  that  if  any  company  or  corporation 
organized  under  this  act  shall  fail  to  comply  with  the  pro- 
visions of  this  section,  it  shall  thereby  forfeit  the  franchise 
given  it  by  this  act ;  provided,  further,  that  if  any  corporation 
organized  under  this  act,  shall  be  restrained,  prevented  or 
enjoined  by  any  proceedings  whatever  at  law  or  equity  from 
prosecuting  the  work  on  its  road,  or  from  opening  or  com- 
pleting its  said  road,  the  time  during  which  any  such  corpo- 
ration shall  be  so  restrained,  prevented  or  enjoined,  shall  not 
be  taken  or  computed  as  any  part  of  the  time  allowed  and 
limited  in  this  section  for  the  opening  and  completing  of  said 
road. 

POWER  TO  BORROW  MONEY,  ETC. 

Section  S;^.  Any  corporation  organized  under  this  act  for 
the  construction  and  operation  of  a  railroad,  shall  have  power 


94  CORPORATION'    LAW    OF    DELAWARE. 

to  borrow  such  sums  of  money,  from  time  to  time,  not  ex- 
ceeding in  the  aggregate  double  the  amount  of  its  full  paid 
capital  stock,  as  shall  be  necessary  to  build,  construct,  or  re- 
pair its  road,  and  furnish  all  necessary  engines  and  other 
equipments  for  the  uses  and  objects  of  said  corporation,  and 
to  secure  the  repayment  thereof  by  the  execution,  negotia- 
tion and  sale  of  any  bond  or  bonds,  and  secure  the  same  by 
mortgage  on  said  lands,  privileges,  franchises  and  appurte- 
nances of  and  belonging  to  said  corporation,  provided  that 
said  corporation  shall  not  plead  any  statute  or  statutes  against 
usury  in  any  court  of  law  or  equity,  in  any  suit  instituted  to 
enforce  the  payment  of  any  bond  or  mortgage  executed 
under  the  provisions  of  this  section ;  and  provided  further, 
that  said  bonds  and  mortgages  shall  constitute  a  first  lien  on 
the  railroad,  its  cars,  real  estate  and  franchises,  and  the  pro- 
ceeds of  said  bonds  shall  be  used  for  the  purpose  of  aiding  in 
the  construction  of  said  railroad  and  equipments ;  and  pro- 
vided further,  that  if  any  person  or  persons  shall  issue  such 
bonds  to  any  greater  amount  than  double  the  amount,  at  the 
time  of  such  issue,  that  shall  have  been  actually  paid  up  on 
the  capital  stock  of  such  railroad,  he,  she  or  they  shall  be 
guilty  of  a  misdemeanor,  and  shall  be  punished  by  a  fine  of 
not  more  than  two  thousand  dollars  or  by  imprisonment  for 
not  more  than  three  years,  or  by  both  at  the  discretion  of  the 
court. 

FENCES.  CATTLE  GUARDS,  ETC. 

Section  84.  Every  corporation  created  under  this  act.  for 
the  construction  of  a  railroad,  shall  erect  and  maintain  fences 
on  both  sides  of  its  road,  of  the  height  and  strength  of  a 
fence  required  by  law,  with  openings  or  gates  or  bars  therein 
at  farm  crossings  or  the  road  for  the  use  of  proprietors  of 
lands  adjoining  such  railroad ;  and  shall  also  construct  and 
maintain  cattle  guards  at  all  road  crossings  suitable  and  suflfi- 
cient  to  prevent  cattle  and  other  animals  from  getting  on  the 
railroad :  and  until  such  fences  and  cattle  guards  shall  be  duly 
made,  the  corporation  shall  be  liable  for  all  damages  which 


CORPORATION    LAW    OF    DELAWARE.  95 

shall  be  done  by  their  engines  and  cars  to  cattle,  horses  or 
other  animals  thereon ;  and  after  such  fences  and  guards  shall 
be  duly  made  and  maintained  the  corporation  shall  not  be 
liable  for  any  such  damages,  unless  negligently  or  wilfully 
done ;  and  if  any  person  shall  ride,  lead  or  drive  any  horse  or 
other  animal  upon  such  railroad  and  within  such  fences  and 
guards  other  than  at  farm  crossings,  without  the  consent  of 
the  corporation,  he  shall  for  every  such  ofifense  forfeit  a  sum 
not  exceeding  ten  dollars,  and  shall  also  pay  all  damages 
which  shall  be  sustained  thereby  to  the  party  aggrieved ;  it 
shall  not  be  lawful  for  any  person  other  than  those  connected 
with  or  employed  upon  the  railroad  to  walk  along  the  track 
or  tracks  of  any  such  railroad,  except  when  the  same  be  laid 
along  public  roads  or  streets. 

BADGE  OF  CONDUCTOR,  ETC. 

Section  85.  Every  conductor,  baggagemaster  or  brake- 
man  of  any  railroad  corporation  formed  under  this  act,  em- 
ployed in  a  passenger  train,  shall  wear  upon  his  hat  or  cap  a 
badge  which  shall  indicate  his  oflfice  and  the  initial  letters  of 
the  name  of  the  corporation  by  which  he  is  employed ;  no 
conductor  or  collector  of  fares  or  tickets  without  such  badge 
shall  be  entitled  to  demand  or  receive  from  any  passenger 
any  fare  or  ticket,  or  to  exercise  any  powers  of  his  office,  and 
no  officer  without  such  badge  shall  have  authority  to  meddle 
or  interfere  with  any  passenger,  his  baggage  or  property. 

DAMAGING  PROPERTY  OF  ROAD. 

Section  86.  Any  person  who  shall  wilfully  impair,  injure, 
destroy  or  obstruct  the  use  of  any  railroad  enjoyed  under  the 
provisions  of  this  act  or  any  of  its  necessary  works,  wharves, 
bridges,  carriages,  engines,  cars,  machines,  or  other  property, 
shall  forfeit  and  pay  to  the  corporation  the  sum  of  fifty  dol- 
lars, to  be  by  it  recovered  in  any  court  having  competent 
jurisdiction,  in  any  action  of  debt :  and  further  shall  be  liable 
for  all  damages  sustained. 


96  CORPORATION    LAW    OF    DELAWARE. 

ANNUAL  REPORT  TO  STOCKHOLDERS. 

Section  87.  It  shall  be  the  duty  of  every  railroad  corpora- 
tion created  under  the  provisions  of  this  act  to  make  an  an- 
nual report  to  the  stockholders  of  its  operations,  which  re- 
port shall  be  verified  by  the  affidavit  of  the  secretary,  treas- 
urer, superintendent  or  directors  of  the  corporation,  and  shall 
state : 

The  entire  length  of  the  road  in  operation,  the  length  of 
single  track,  the  length  of  double  track,  and  the  weight  of 
rail  per  yard. 

The  full  amount  of  the  capital  stock  actually  subscribed 
and  the  full  amount  paid  thereon. 

The  entire  amount  of  the  actual  cost  of  the  road,  showing 
the  amount  expended  for  the  right  of  way,  bridging,  grading, 
iron  and  other  buildings  respectively,  and  for  all  other  pur- 
poses incidental  to  the  construction  of  such  road. 

The  nature  of  the  amount  of  its  indebtedness,  distinguish- 
ing the  first  or  other  mortgage  bonds,  and  the  unsecured  in- 
debtedness and  the  amount  due  the  corporation. 

The  amount  received  for  the  transportation  of  passengers, 
property  and  mails,  for  interest  and  from  all  other  sources 
respectively. 

The  amount  of  freight,  specifying  the  quantity  in  tons  or 
other  usual  mode  of  measurement. 

The  full  amount  paid  for  repairs  of  the  road,  buildings,  en- 
gines and  cars  respectively,  for  fuel,  taxes  and  interest,  speci- 
fying the  indebtedness  on  which  the  same  is  paid :  for  the 
wages  and  employes ;  the  aggregate  amount  paid  for  salaries 
of  officers  and  for  any  other  purpose  incidental  to  the  busi- 
ness of  transportation,  so  as  to  give  a  complete  statement  of 
the  entire  annual  expense  of  the  corporation. 

The  entire  amount  paid  for  loss  and  damage  to  freight  and 
injury  to  person  and  property. 

The  full  number  and  amount  of  dividends,  and  when  made 
and  in  what  manner  such  dividends  have  been  paid. 

The  entire  amount  appropriated  to  sinking  fund,  and  the 


CORPORATION    LAW    OF    DELAWARE.  97 

manner  in  which  the  same  has  been  applied,  and  the  total 
amount  then  held  by  such  sinking  fund. 

The  whole  number  of  persons  killed  or  injured,  the  causes 
thereof,  if  known,  and  whether  passengers  or  persons  em- 
ployed by  the  corporation ;  and  the  secretary  of  each  railroad 
corporation,  formed  as  aforesaid,  shall  mail  to  every  stock- 
holder thereof,  whose  post-office  address  is  known,  a  copy 
of  said  annual  report,  and  shall  file  a  certified  copy  thereof 
with  the  secretary  of  state  on  or  before  the  expiration  of  fif- 
teen days  from  the  making  of  such  annual  report. 

MERGER. 

Section  88.  Any  two  or  more  railroad  corporations  cre- 
ated under  this  act,  or  any  one  of  such  corporations,  and  a 
corporation  now  existing  for  the  construction  and  operation 
of  a  railroad  whose  charter  does  not  prohibit  merger  or  con- 
solidation, may  consolidate  into  a  single  corporation  in  the 
manner  provided  in  section  54  of  this  act,  and  the  other  sec- 
tions thereof  relating  to  the  consolidation  of  corporations, 
and  such  new  corporation  shall  possess  all  the  powers,  rights 
and  privileges  conferred  upon  such  two  or  more  corpora- 
tions, and  shall  be  subject  to  all  the  restrictions  and  liabilities 
and  perform  all  the  duties  imposed  by  the  provisions  of  their 
respective  charters  or  certificates  of  incorporation  not  incon- 
sistent with  the  provisions  of  this  act. 

SIGNAL  BOARDS. 

Section  89.  Every  railroad  corporation  formed  under  this 
act  shall  cause  signal  boards,  well  supported  by  posts,  or 
otherwise,  at  such  heights  as  to  be  easily  seen  by  travelers, 
and  not  obstructing  travel,  containing  on  each  side,  in  capital 
letters,  at  least  five  inches  high,  the  following  inscription, 
"Railroad  Crossing,"  to  be  placed  and  constantly  maintained 
at  such  public  highway  where  it  is  crossed  by  the  railroad  at 
the  same  level ;  but  such  board  need  not  be  put  up  in  cities  or 
towns,  unless  required  by  the  authorities  thereof. 
7 


98  CORPORATION    LAW    OF    DELAWARE. 

GATES,   FLAGMEN,  ETC. 

Section  90.  Whenever,  in  the  opinion  of  the  authorities 
of  any  city  or  incorporated  town,  the  pubhc  interest  requires 
that  a  gate  be  erected  and  maintained,  or  a  flagman  stationed 
and  kept  at  the  place  where  any  highway  or  street  is  crossed, 
within  the  corporate  Hmits  of  such  town  or  city,  by  any  rail- 
road constructed  under  this  act,  they  shall  give  the  superin- 
tendent or  manager  of  the  railroad  written  notice  that  the 
same  is  required,  and  the  corporation  shall,  within  the  time 
prescribed  in  such  notice,  erect  and  maintain  at  such  crossing 
the  style  of  gate  directed  in  said  notice,  and  keep  a  man  in 
charge  of  the  same  during  such  hours  as  the  said  authorities 
may  designate,  or  keep  a  flagman  at  such  crossing  during 
such  hours  as  they  may  require.  And  the  said  authorities 
may  authorize  the  discontinuance  of  such  gate  or  flagman 
whenever  in  their  judgment  the  public  interest  no  longer  re- 
quires the  same. 

LIGHTING  OF  CARS. 

Section  91.  No  passenger  car  on  any  railroad  of  any  cor- 
poration organized  under  the  provisions  of  this  act  shall  be 
lighted  by  naphtha  or  by  illuminating  oil  or  fluid  made  in  part 
of  naphtha,  or  of  any  oil  or  fluid  which  will  ignite  at  a  tem- 
perature of  less  than  three  hundred  degrees  Fahrenheit. 

AIR   BRAKE. 

Section  92.  No  regular  or  other  passenger  train  on  any 
railroad  constructed  under  this  act  shall  be  run  without  an 
air  brake,  or  some  equally  effective  appliance  for  controlling 
the  speed  of  trains,  which  may  be  applied  by  the  engineer  to 
each  car  composing  the  train,  and  which  shall  at  all  times  be 
kept  in  good  condition  and  ready  for  use  at  the  discretion  of 
the  engineer. 

Section  93.  Any  corporation  faihng  to  comply  with  or 
violating  or  permitting  any  of  its  employes  or  agents  to  vio- 
late any  of  the  provisions  of  sections  85,  89,  90,  91  and  92  of 
this  act  shall  in  addition  to  subjecting  itself  to  any  damages 


CORPORATION    LAW    OF    DELAWARE.  99 

that  may  be  caused  by  such  failure  or  violation,  be  guilty  of 
a  misdemeanor,  and  upon  conviction  thereof  be  fined  for 
failure  or  violation,  not  less  than  one  hundred  dollars  nor 
more  than  five  hundred  dollars. 

DISCRIMINATION  IN  CHARGES,   ETC. 

Section  94.  No  railroad  or  railway  corporation  organized 
under  this  act  shall  charge,  demand  or  receive  from  any  per- 
son, company  or  corporation  for  the  transportation  of  pas- 
sengers or  property  a  greater  sum  than  it  shall  charge  or  re- 
ceive from  any  other  person,  company  or  corporation  for  like 
service,  from  the  same  place,  under  like  conditions,  under 
similar  circumstances,  and  for  the  same  period  of  time.  For 
every  violation  of  the  provision  of  this  section  such  corpo- 
ration shall  be  liable  to  the  party  suffering  thereby  in  double 
the  entire  amount  so  charged  to  such  party,  to  be  recovered 
before  any  court  having  jurisdiction  thereof :  provided,  how- 
ever, that  nothing  in  this  section  shall  be  construed  to  pro- 
hibit the  carriage  or  handling  of  persons  or  property  free  or 
at  reduced  rates  for  the  United  States,  state  or  municipal 
governments,  or  to  or  from  fairs  and  expositions  for  exhi- 
bitions thereof:  or  the  free  carriage  of  destitute  and  homeless 
persons  transported  by  charitable  societies  and  the  necessary 
agents  employed  in  such  transportation ;  or  the  issuance  of 
mileage,  excursion,  or  commutation  passenger  tickets;  nor 
to  prohibit  any  such  corporation  from  giving  reduced  pas- 
senger rates  to  ministers  of  religion  solely  engaged  in  minis- 
terial duties,  or  to  the  United  States,  state  or  municipal  gov- 
ernments ;  nor  to  prohibit  any  such  corporation  from  giving 
free  carriage  to  their  own  officers  and  employes ;  or  to  pre- 
vent the  principal  officers  of  any  such  corporation  from  ex- 
changing passes  or  tickets  with  other  railroad  corporations 
for  their  officers  and  employes;  nor  to  prohibit  any  such  cor- 
poration from  giving  reduced  rates  of  transportation  to  other 
railroad  corporations  for  railroad  construction,  material, 
equipment  or  supplies. 


JOO  CORPORATION  LAW  OF  DELAWARE. 

FEES  TO  STATE. 

Section  95.  Every  railroad  corporation  organized  under 
the  provisions  of  this  act  shall  be  required  upon  filing  the  cer- 
tificate to  pay  to  the  secretary  of  state  the  fees  hereinafter 
provided  for;  and  also  pay  to  the  state  treasurer  for  the  use 
of  the  state  such  tax  as  is  required  by  the  provisions  of  chap- 
ter 458,  volume  12  of  the  laws  of  this  state,  entitled  "An  act 
to  raise  revenue  for  this  state,"  and  Chapter  392,  volume  13 
of  the  laws  of  this  state,  entitled  "An  act  taxing  railroad  and 
canal  companies  in  this  state;"  provided,  however,  that  such 
railroad  shall  be  entitled  to  the  rights  of  commutation  there- 
for as  is  provided  by  law  for  other  railroad  corporations  of 
this  state. 

STEAM,  HEAT  AND  POWER. 

Section  96.  Every  corporation  organized  under  the  pro- 
visions of  this  act  for  the  purpose  of  producing  or  distrib- 
iiting  steam,  heat  and  power,  shall  in  addition  to  the  powers 
conferred  upon  corporations  generally,  have  full  authority  to 
lay  the  necessary  pipes  and  conduits  beneath  the  public  roads, 
highways,  streets,  avenues  and  alleys  in  this  state ;  provided, 
however,  that  such  pipes  and  conduits  shall  be  laid  at  least 
three  feet  below  the  surface  of  the  same,  and  shall  not  in  any 
wise  unnecessarily  obstruct  or  interfere  with  public  travel,  or 
damage  public  or  private  property ;  and  provided,  also,  that 
the  consent  of  the  council,  town  commissioners  or  other  per- 
sons having  control  over  the  public  roads,  highways,  streets, 
avenues  and  alleys  of  the  city,  town  and  district  wherein  or 
through  which  it  is  contemplated  to  lay  such  pipes  and  con- 
duits beneath  such  public  roads,  highways,  streets,  avenues 
or  alleys  shall  first,  and  as  a  condition  precedent,  be  obtained 
before  any  such  public  roads,  highways,  streets,  avenues  or 
alleys  shall  be  disturbed,  opened  or  dug  up ;  such  consent  of 
said  council  or  town  commissioners  to  be  by  ordinance  of 
such  council  or  commissioners  duly  adopted,  or  of  such  per- 


CORPORATION    LAW    OF    DELAWARE.  lOI 

son  having  control  over  the  public  roads  or  highways,  by  res- 
olution adopted  at  a  meeting  to  be  held  not  less  than  thirty 
days  after  notice  thereof  shall  have  been  given  by  notices 
posted  up  in  five  of  the  most  public  places  on  the  public  road 
or  highway  which  is  proposed  to  be  used  for  the  purposes 
aforesaid ;  that  such  use  of  public  roads,  highways,  or  streets, 
avenues  and  alleys  in  any  of  the  cities,  towns  or  districts  of 
this  state  shall  be  subject  to  such  terms,  regulations  and  re- 
strictions as  may  be  imposed  by  the  council,  town  commis- 
sioners or  other  persons  having  control  over  the  public  roads 
and  highways  of  the  district,  and  that  the  portions  of  surface  of 
the  roads,  highways,  streets,  avenues  and  alleys  disturbed  in 
laying  the  said  pipes  shall  be  immediately  restored  to  their 
original  condition,  and  that  any  pavements  which  are  re- 
moved for  the  purpose  of  laying  or  repairing  the  pipes  shall 
be  restored  to  as  good  condition  as  they  were  previous 
thereto,  and  so  maintain  the  same  for  six  months  after  the 
completion  of  the  work ;  and  in  case  of  failure  on  the  part 
of  the  corporation  to  so  maintain  and  restore  the  same,  the 
street  commissioner  or  other  officer  having  supervision  of 
the  streets  may  properly  restore  and  maintain  the  same,  and 
the  costs  thereof  may  be  recovered  by  the  city  or  town  from 
the  corporation  in  any  court  of  competent  jurisdiction. 

LAYING  PIPES. 

Section  97.  It  shall  be  the  duty  of  every  corporation  or- 
ganized under  the  provisions  of  this  act  in  laying  any  pipes 
or  conduits  in  any  of  the  public  roads,  highways,  streets,  ave- 
nues and  alleys,  to  be  used  for  conveying  steam,  heat  or 
power,  to  lay  the  same  at  a  distance  not  less  than  three  feet, 
if  possible,  from  the  outside  of  any  water  or  gas  pipe  already 
laid,  except  in  cases  where  it  shall  be  necessary  that  said  pipes 
or  conduits  shall  cross  any  such  water  or  gas  pipe,  and  there 
such  pipes  or  conduits  shall  be  at  least  twelve  inches  distant 
from  the  outside  of  any  water  or  gas  pipe  already  laid. 


102  CORPORATION    LAW    OF    DELAWARE. 

ELECTRICITY,   HEAT   AND   POWER. 

Section  98.  Every  corporation  organized  under  the  pro- 
visions of  this  act  for  the  purpose  of  constructing,  maintain- 
ing and  operating  works  for  the  supply  and  distribution  of 
electricity  for  electric  lights,  heat  or  power,  shall  in  addition 
to  the  powers  conferred  upon  corporations  generally,  have 
full  power  to  use  the  public  roads,  highways,  streets,  avenues 
and  alleys  in  this  state  for  the  purpose  of  erecting  posts  or 
poles  on  the  same,  to  sustain  the  necessary  wires  and  fixtures ; 
provided  that  the  consent  of  the  council,  town  commission- 
ers or  other  persons  having  control  over  the  public  roads, 
highways,  streets,  avenues  and  alleys  of  the  city,  town  and 
district  in  or  upon  which  the  said  posts  or  poles  are  to  be 
erected,  shall  first,  and  as  a  condition  precedent,  be  obtained; 
and  provided  further,  that  no  posts  or  poles  shall  be  erected 
in  any  street  of  any  city  or  incorporated  town  except  in  those 
streets  which  shall  be  designated  by  the  said  authorities 
thereof,  and  then  only  in  such  place  and  manner  as  shall  be 
thus  designated,  and  that  the  same  shall  be  so  located  as  in 
no  way  to  interfere  with  the  safety  or  convenience  of  persons 
traveling  on  or  over  the  said  streets,  highways  and  roads; 
and  that  the  use  of  public  streets  in  any  of  the  cities  and  in- 
corporated towns  of  this  state  shall  be  subject  to  such  regula- 
tions and  taxation  as  may  be  first  imposed  by  the  corporate 
authorities  of  such  cities  and  towns;  and  provided,  also,  that 
no  posts  or  poles  shall  be  erected  upon  the  soil  or  property 
of  any  person  or  persons  without  first  obtaining  the  consent 
in  writing  of  the  owner  or  owners  of  the  soil  or  property ; 
and  provided,  also,  that  any  wire  crossing  a  railroad  shall  not 
be  at  a  less  elevation  than  twenty-three  feet. 

LAYING  PIPES  OR  CONDUITS,   ETC. 

Section  99.  Every  such  corporation  is  authorized  and 
empowered  to  lay  pipes  or  conduits  and  to  lay  wires  therein 
beneath  the  public  roads,  highways,  streets,  avenues  and 
alleys  as  they  may  deem  necessary ;  provided,  that  said  pipes 


CORPORATION    LAW    OF    DELAWARE.  IO3 

and  conduits  shall  be  laid  at  least  two  feet  below  the  surface 
of  the  same  and  shall  not  in  any  wise  unnecessarily  obstruct  or 
interfere  with  public  travel,  or  damage  public  or  private  prop- 
erty, and  shall  not  be  laid  nearer  than  three  feet,  except  as 
is  hereinafter  excepted,  to  any  water  or  gas  main ;  but  no 
public  streets  shall  be  opened  for  the  purpose  of  laying  any 
such  pipes,  conduits  or  wires  without  the  consent  of  the 
council  of  any  city  or  the  town  commissioners  of  any  incor- 
porated town,  or  other  persons  having  control  over  said  pub- 
lic roads,  highways,  streets,  avenues  and  alleys;  and  pro- 
vided, that  such  use  of  the  public  streets  in  any  of  the  cities 
and  towns  of  this  state  shall  be  subject  to  such  regulations, 
taxation  and  restrictions  as  may  be  first  imposed  by  the  cor- 
porate authorities  of  such  cities  and  towns. 

LAYING  WIRES. 

Section  ioo.  Every  corporation  in  laying  wires  for  con- 
veying electricity  or  the  conduits  containing  said  wires,  shall 
lay  the  same  at  the  greatest  practicable  distance  from  the  out- 
side of  any  water  or  gas  pipe  now  laid  down,  and  when  it  is 
practicable  and  so  provided  in  its  permits  such  distance  shall 
not  be  less  than  three  feet,  except  in  case  where  it  shall  be 
necessary  that  the  said  wires  or  conduits  shall  cross  or  inter- 
sect any  such  water  or  gas  pipe. 

GAS  AND  WATER. 

Section  ioi.  Every  corporation  organized  under  the  pro- 
visions of  this  act  for  the  purpose  of  the  production,  distribu- 
tion and  sale  of  gas,  to  be  made  from  coal  or  other  materials, 
and  also  every  corporation  organized  as  aforesaid  for  the  sup- 
ply and  distribution  of  water,  shall  in  addition  to  the  powers 
conferred  upon  corporations  generally,  have  full  authority  to 
lay  down  necessary  pipes,  water-mains  and  conduits  beneath 
the  public  roads,  highways,  streets,  avenues  and  alleys  of  any 
city,  incorporated  town  or  district  of  this  state ;  provided, 
however,  that  such  pipes,  water-mains  and  conduits  shall  be 


104  CORPORATION    LAW    OF    DELAWARE. 

laid  at  least  three  feet  below  the  surface  of  the  same,  and  shall 
not  in  any  wise  unnecessarily  obstruct  or  interfere  with  public 
travel,  or  damage  public  or  private  property ;  and  provided, 
also,  that  the  consent  of  the  council,  town  commissioners  or 
other  persons  having  control  over  the  public  roads,  highways, 
streets,  avenues  and  alleys  of  the  city,  town  and  district 
wherein  or  through  which  it  is  contemplated  to  lay  such 
pipes,  water-mains  and  conduits  beneath  such  public  roads, 
highways,  streets,  avenues  or  alleys  shall  first  and  as  a  con- 
dition precedent,  be  obtained,  before  any  of  such  public  roads, 
highways,  streets,  avenues  or  alleys  shall  be  disturbed,  opened 
or  dug  up ;  such  consent  of  such  council  or  town  commis- 
sioners or  other  persons  having  control  over  such  roads, 
highways,  streets,  avenues  and  alleys  to  be  by  ordinance  of 
such  council  or  commissioners  duly  adopted,  or  by  resolution 
of  such  persons  having  control  over  the  public  roads  or  high- 
ways, adopted  at  a  meeting  to  be  held  not  less  than  thirty 
days  after  notice  thereof  shall  have  been  given  by  notices 
posted  up  in  five  of  the  most  public  places  on  the  public  road 
or  highway  which  is  proposed  to  be  used  for  the  purpose 
aforesaid ;  that  such  use  of  public  roads,  highways  or  streets, 
avenues  and  alleys  in  any  of  the  cities,  towns  or  districts  of 
this  state  shall  be  subject  to  such  terms,  regulations,  taxation, 
and  restrictions  as  may  be  imposed  by  the  council,  town  com- 
missioners or  other  persons  having  control  over  the  public 
roads  and  highways  of  the  district,  and  that  the  portions  of 
surfaces  of  the  roads,  highways,  streets,  avenues  and  alleys 
disturbed  in  laying  the  said  pipes  shall  be  immediately  re- 
stored to  their  original  condition,  and  that  any  pavements 
which  are  removed  for  the  purpose  of  laying  or  repairing  the 
pipes,  water-mains  and  conduits,  shall  be  restored  to  as  good 
condition  as  they  were  previous  thereto,  and  so  maintain  the 
same  for  six  months  after  the  completion  of  the  works,  and 
in  case  of  failure  on  the  part  of  the  corporation  to  so  restore 
and  maintain  the  same,  the  street  commissioner  or  other 
officer  having  supervision  of  the  streets  may  properly  restore 


CORPORATION    LAW    OF    DELAWARE.  IO5 

and  maintain  the  same,  and  the  costs  thereof  may  be  recov- 
ered by  the  city  or  town  from  the  corporation  in  any  court 
of  competent  jurisdiction. 

TELEGRAPH  OB,  TELEPHONE. 

Section  102.  That  any  telegraph  or  telephone  corpora- 
tion organized  under  the  provisions  of  this  act  shall  in  ad- 
dition to  the  powers  conferred  upon  corporations  generally, 
have  authority  to  occupy  and  use  public  streets,  roads,  lanes, 
alleys,  avenues,  turnpikes  and  water-ways  within  this  state,  or 
elsewhere,  if  they  shall  extend  their  lines  and  business,  for  the 
erection  of  poles  and  wires  or  cable  or  underground  conduits, 
portions  of  which  they  may  lease,  rent  or  hire  to  other  like 
companies ;  provided,  that  before  entering  upon  any  street, 
road,  lane,  alley,  avenue,  turnpike  or  water-way  the  consent 
of  the  authorities  having  jurisdiction  thereof  shall  have  first 
been  obtained,  and  the  same  shall  be  used  and  occupied  under 
such  rules  and  regulations  as  shall  be  prescribed  by  such  au- 
thorities ;  and  that  the  portions  of  the  surfaces  of  the  streets, 
avenues  or  alleys,  disturbed  in  laying  the  wires,  cables  or  un- 
derground conduits  shall  be  immediately  restored  to  their 
original  condition,  and  that  any  pavements  which  are  re- 
moved for  the  purpose  of  laying  or  repairing  the  wires,  cables 
or  underground  conduits,  shall  be  restored  to  as  good  con- 
dition as  they  were  previous  thereto,  and  so  maintained  for 
six  months  after  the  completion  of  the  works,  and  in  case  of 
failure  on  the  part  of  the  corporation  to  so  restore  and  main- 
tain the  same,  the  proper  authorities  having  supervision  of 
the  streets,  avenues  and  alleys  may  properly  restore  and  main- 
tain the  same,  and  the  cost  thereof  may  be  recovered  by  the 
city,  town  or  district  from  the  corporation  in  any  court  of 
competent  jurisdiction;  provided,  that  all  posts  or  poles 
which  shall  be  erected  by  authority  herein  conferred  shall  be 
so  located  as  in  no  way  to  interfere  with  the  safety  or  con- 
venience of  persons  traveling  on  or  over  the  said  roads  and 
highways ;  and  provided  further,  that  all  wires  fastened  upon 


I06  CORPORATION    LAW    OF    DELAWARE. 

posts  or  poles  erected  as  aforesaid,  shall  be  placed  at  the 
height  of  not  less  than  twenty  feet  above  all  road  crossings, 
and  twenty-three  feet  above  railroad  crossings;  and  that  no 
posts  or  poles  shall  be  erected  upon  the  soil  or  property  of 
any  person  without  first  obtaining  the  written  consent  of  the 
owner  thereof. 

RAILWAYS.     FORMATION. 

Section  103.  Any  number  of  persons  not  less  than  five 
may  form  a  corporation  under  the  provisions  of  this  act, 
which  corporation  so  formed  as  aforesaid,  shall  have  per- 
petual succession  for  the  purpose  of  constructing,  maintain- 
ing and  operating  a  railway,  for  the  transportation  of  freight 
and  passengers,  the  carriages,  coaches  and  cars  of  which  to 
be  moved  or  propelled  by  electricity,  by  cable  or  motor,  or 
by  any  improved  motive  power  other  than  steam,  and  shall 
do  and  perform  the  several  matters  and  things  hereinafter 
stated,  and  shall  have  and  exercise  all  the  rights,  powers  and 
privileges  hereinbefore  and  hereinafter  conferred,  and  be  sub- 
ject to  all  the  duties,  limitations,  restrictions  and  liabilities 
hereinafter  imposed  upon  such  corporations ;  and  for  that  pur- 
pose may  make  and  sign  articles  of  association,  in  lieu  of  the 
articles  of  association  hereinbefore  required  by  the  provisions 
of  this  act,  for  corporations  generally  and  for  railroad  corpo- 
rations where  steam  power  is  used,  in  which  shall  be  stated : 

1.  The  name  of  corporation. 

2.  The  place  from  which  and  to  which  such  railwa}'  is  to 
be  constructed,  maintained  and  operated. 

3.  The  estimated  length  of  such  railway  and  the  name  of 
each  county  in  this  state  through  or  into  which  it  is  intended 
to  be  made. 

4.  The  amount  of  the  capital  stock  of  the  corporation 
which  shall  not  be  less  than  two  thousand  dollars  for  every 
mile  of  road  proposed  to  be  constructed. 

5.  The  number  of  shares  of  which  said  capital  stock  shall 
consist. 


CORPORATION    LAW    OF    DELAWARE.  lO/ 

6.  The  names  and  places  of  residence  of  the  five  directors 
of  the  corporation  who  shall  manage  its  affairs  for  the  first 
year  and  until  others  are  chosen  in  their  places;  and  each 
such  person  shall  subscribe  thereto  his  name,  place  of  resi- 
dence and  the  number  of  shares  of  stock  he  agrees  to  take  in 
such  corporation.  At  least  one  of  said  directors  shall  be  a 
resident  of  this  state. 

7.  The  name  of  the  city,  town,  county  or  place  within  the 
county,  in  this  state,  in  which  its  principal  ofiftce  or  place  of 
business  will  be  located  in  this  state. 

APPROVAL   OF  JUDGE,   FILING,   ETC. 

Section  104.  Said  articles  of  association  shall  be  pre- 
sented to  one  of  the  judges  of  the  superior  court  of  the  state 
of  Delaware,  who  shall  examine  the  same,  and  if  found  to 
conform  to  the  requirements  of  this  act,  shall  endorse  his 
certificate  thereon  accordingly.  On  compliance  with  the 
foregoing  provisions  and  the  requirements  of  the  next  suc- 
ceeding section,  which  latter  shall  be  evidenced  by  the  re- 
ceipt of  the  state  treasurer,  delivered  to  the  secretary  of  state, 
such  articles  of  association  may  be  filed  in  the  office  of  the 
secretary  of  state,  who  shall  endorse  thereon  in  writing  the 
day  they  are  filed,  and  record  the  same  in  a  book  to  be  pro- 
vided by  him  for  that  purpose ;  and  upon  tendering  the  said 
articles  to  the  secretary  of  state  to  be  filed,  the  persons  who 
have  so  subscribed  such  articles  of  incorporation  and  all  per- 
sons who  shall  become  stockholders  in  such  corporation  shall 
be  a  corporation  by  the  name  specified  therein ;  every  such 
corporation  formed  under  this  act,  in  addition  to  the  general 
powers  hereinbefore  in  this  act  set  forth,  shall  have  power : 

ADDITIONAL   POWERS. 

1.  To  have  authority,  by  its  officers  and  servants,  to  enter 
upon  the  lands  or  waters  of  any  person  or  persons,  which 
may  be  necessary,  to  make  such  examination  and  surveys  for 
its  proposed  railway  as  shall  be  required  to  be  made  in  the 


I08  CORPORATION    LAW    OF    DELAWARE. 

selection  of  the  most  advantageous  route,  but  subject  at  all 
times  to  responsibility  for  all  and  any  damages  which  shall 
be  done  to  the  property  of  any  such  person  or  persons. 

2.  To  aid  in  the  construction,  operation  and  maintenance 
and  accommodation  of  its  railway  may  take  and  hold  such 
voluntary  grants  of  real  estate  and  other  property  as  shall  be 
made  to  it,  but,  in  all  instances,  the  real  estate  received  as  a 
voluntary  grant  shall  be  held  and  used  for  the  purpose  of  such 
grant  only. 

3.  For  the  sole  purpose  of  the  construction,  operation  and 
maintenance  of  its  railway,  and  the  stations  and  other  accom- 
modations necessary  to  accomplish  the  object  of  its  incorpo- 
ration, it  may  purchase,  hold  and  use  all  such  real  estate  and 
other  property  as  may  be  necessary. 

4.  To  construct  its  road  and  lay  out  the  same  as  hereby 
provided  and  for  the  purposes  of  cuttings  and  embankments 
to  take  as  much  more  land  as  may  be  necessary  or  required 
for  the  proper  construction  and  security  for  the  road. 

5.  To  use  and  exercise  all  other  rights  and  powers  hereby 
granted. 

STOCK  REQUIRED  TO  BE  PAID. 

Section  105.  Articles  of  association,  in  compliance  with 
the  provisions  of  sections  103  and  104  of  this  act,  shall  not  be 
filed  and  recorded  in  the  office  of  the  secretary  of  state  until 
at  least  five  hundred  dollars  of  stock  for  every  mile  of  railway 
proposed  to  be  made  is  subscribed  thereto  and  paid,  in  good 
faith  and  in  cash,  to  the  directors  named  in  said  articles  of 
association,  nor  until  the  said  directors  shall  have  deposited 
the  said  money  so  subscribed  and  paid  to  them  with  the  state 
treasurer,  who  is  constituted  the  custodian  of  the  same,  and 
shall  hold  the  same,  subject  to  be  repaid  to  the  directors  of 
the  said  corporation,  or  to  the  treasurer  thereof,  in  sums  of 
five  hundred  dollars  for  each  mile  of  said  railway,  upon  the 
construction  of  which  it  shall  be  proved,  to  his  satisfaction, 
that  the  said  corporation  has  expended  at  least  the  sum  of 
five  hundred  dollars,  nor  until  there  is  endorsed  on  such  ar- 


CORPORATION    LAW    OF    DELAWARE.  IO9 

tides  of  association,  or  annexed  thereto,  an  affidavit,  made 
by  at  least  three  of  the  directors  named  in  said  articles  of  as- 
sociation, that  the  amount  of  stock  required  by  this  section 
has  been  in  good  faith  subscribed  and  paid  in  cash  as  afore- 
said, and  that  it  is  intended,  in  good  faith,  to  construct  or 
maintain  and  operate  the  railway  mentioned  in  such  articles 
of  association,  which  affidavit  shall  be  recorded  with  the  ar- 
ticles of  association  as  aforesaid. 

SUBSCRIPTIONS  TO  STOCK.     TEN  PEE,  CENT.  TO  BE  PAID  ON. 

Section  io6.  The  directors  named  in  said  articles  of  asso- 
ciation may,  when  such  articles  of  association  and  affidavit 
are  filed  and  recorded  in  the  office  of  the  secretary  of  state,  in 
case  the  whole  of  the  capital  stock  is  not  before  subscribed, 
continue  to  receive  subscriptions  until  the  whole  capital  stock 
is  subscribed;  at  the  time  of  subscribing  every  subscriber  shall 
pay  to  the  directors  ten  per  centum  on  the  amount  subscribed 
by  him,  in  money,  and  no  subscription  shall  be  received  or 
taken  without  such  payment. 

DIRECTORS. 

Section  107.  That  there  shall  be  a  board  of  not  less  than 
five  directors  of  every  corporation  formed  under  this  act  for 
the  purpose  of  constructing  and  operating  railways,  to  man- 
age its  affairs.  Said  directors  shall  be  chosen  annually  in 
the  same  manner  that  is  provided  for  the  choosing  of  direct- 
ors for  railroads  as  provided  in  section  74  of  this  act,  and  the 
inspectors  to  hold  the  first  election  shall  be  appointed  by  the 
board  of  directors  named  in  the  articles  of  association ;  no 
person  shall  be  a  director  unless  he  shall  be  a  stockholder, 
owning  stock  absolutely  in  his  own  right,  and  qualified  to 
vote  for  directors  at  the  election  at  which  he  shall  be  chosen : 
at  every  election  of  directors  the  books  and  papers  of  such 
company  shall  be  exhibited  to  the  meeting  and  subject  to  the 
inspection  of  those  present,  provided  a  majority  of  the  stock- 
holders present  shall  require  it. 


no  CORPORATION    LAW    OF    DELAWARE. 

ORGANIZATION. 

Section  io8.  That  within  thirty  days  after  the  articles  of 
association  are  filed  in  the  office  of  the  secretary  of  state,  the 
directors  therein  named  shall  organize  by  the  election  of  one 
of  their  number  president ;  they  may  also  elect  a  treasurer  and 
secretary  and  adopt  such  by-laws  as  may  appear  to  be  proper 
and  right  for  the  government  of  the  corporation. 

INCREASE  OF  CAPITAL  STOCK. 

Section  109.  That  in  case  the  capital  stock  of  any  com- 
pany formed  under  this  act  is  found  to  be  insufficient  for  con- 
structing and  operating  its  railway,  such  company  may  with 
the  concurrence  of  two-thirds  in  amount  of  all  its  stockhold- 
ers increase  its  capital  stock,  from  time  to  time,  to  any 
amount  required  for  the  purpose  of  constructing,  maintain- 
ing and  operating  its  railway ;  such  increase  shall  be  author- 
ized under  the  provisions  which  are  contained  in  section  76 
of  this  act,  in  relation  to  railroads  and  in  compliance  with  all 
conditions  and  requirements  contained  in  said  section  in  re- 
lation thereto. 

STOCK,  PERSONAL  ESTATE,   TRANSFER  OF. 

Section  no.  That  the  stock  of  every  company  formed 
under  this  act  shall  be  deemed  personal  estate  and  be  trans- 
ferable in  the  manner  prescribed  by  the  by-laws  of  the  com- 
pany, but  no  share  shall  be  transferable  until  all  previous  calls 
thereon  shall  have  been  paid. 

ASSESSMENT  OF  DAMAGES,   ETC. 

Section  hi.  Whenever  any  corporation  created  under 
this  act,  for  constructing,  maintaining  and  operating  a  rail- 
way, cannot  agree  with  the  owner  or  owners  of  any  land, 
sand,  earth,  gravel  or  other  materials  necessary  to  be  taken 
and  used  in  the  construction  of  the  said  railway,  for  the  pur- 
chase thereof,  the  said  corporation  may  proceed  for  the  con- 
demnation thereof  in  the  manner  provided  for  in  section  78 


CORPORATION    LAW    OF    DELAWARE.  Ill 

of  this  act,  in  relation  to  railroads;  and  when  the  damages 
ascertained  therefor  in  the  manner  provided  in  said  section 
shall  have  been  paid  or  deposited  in  the  proper  bank  as 
therein  provided,  the  corporation  shall  become  entitled  to 
have,  hold,  use  and  enjoy  the  said  lands  and  materials  for  the 
purposes  by  them  required,  forever. 

WIDTH,   SURVEYS,   ETC. 

Section  112.  That  any  railway  constructed  under  the  pro- 
visions of  this  act  shall  not  exceed  forty  feet  in  width,  unless 
more  land  shall  be  required  for  the  slopes  of  cuts  and  em- 
bankments, with  as  many  sets  of  tracks  and  rails  as  such  cor- 
poration may  deem  necessary,  and  it  shall  be  lawful  for  such 
corporation,  its  agents,  engineers,  superintendents,  or  others 
in  its  employ,  to  enter  at  all  times  upon  all  lands  or  waters 
for  the  purpose  of  exploring,  surveying,  leveling  and  laying 
out  the  route  or  routes  of  such  railway,  and  of  locating  the 
same,  and  all  necessary  works,  buildings,  conveniences,  ap- 
purtenances and  appendages  thereof,  doing  no  unnecessary 
injury  to  private  or  other  property;  and  when  the  route  or 
routes  of  such  railway  and  the  location  or  locations  of  all 
other  works,  buildings,  conveniences,  appurtenances  and  ap- 
pendages thereof  shall  have  been  determined  upon,  and  a 
survey  of  any  such  route  or  routes,  location  or  locations  de- 
posited in  the  office  of  the  secretary  of  state,  then  it  shall  be 
lawful  for  every  such  corporation  formed  under  this  act.  upon 
payment  or  tender  of  such  compensation  as  hereinbefore  pro- 
vided by  its  of^cers,  agents,  engineers,  superintendents, 
workmen  and  other  persons  in  their  employ,  to  construct, 
maintain  and  operate  a  railway  with  a  single  or  double  track, 
with  such  side  tracks,  turnouts,  offices,  stations  and  depots 
as  they  may  deem  necessary  at  and  between  the  points  named 
in  the  articles  of  association,  commencing  at  or  within  and 
extending  to  or  into  any  town,  city  or  village  named  as  the 
place  of  terminus,  and  from  time  to  time,  either  before  or 
after  completion  of  the  main  line,  construct,  maintain  and 


112  CORPORATION    LAW    OF    DELAWARE. 

Operate  branches  within  the  limits  of  any  county  through 
which  said  railway  may  pass,  lay  rails,  and  for  that  purpose  to 
enter  upon,  take  possession  of,  hold,  have,  use,  occupy  and 
excavate  any  lands,  and  erect  any  embankments,  bridges  and 
all  other  necessary  works,  and  to  do  all  other  things  which 
may  be  suitable  for  the  completion,  repairs  or  management 
of  said  railway,  and  for  the  conveyance  of  passengers  and 
freight  to  and  from  the  termini  thereof  by  motive  power 
other  than  steam ;  provided,  always,  that  the  payment  or 
tender  of  payment  of  all  damages  for  the  occupancy  of  all 
lands  through,  under  or  upon  which  the  said  railway  and  its 
conveniences,  appurtenances  and  appendages  may  be  laid  out 
or  located  be  made  before  the  said  corporation,  or  any  person 
under  its  direction  or  employ  shall  enter  upon  or  break 
ground  in  the  premises,  except  for  the  purpose  of  surveying 
and  laying  out  said  railway  and  its  conveniences,  appurte- 
nances and  appendages,  and  of  locating  the  same,  unless  the 
consent  of  the  owner  or  owners  of  such  lands  be  first  had  and 
obtained;  and  provided  further,  that  the  survey  of  the  route 
of  any  branch  shall  not  be  filed  in  the  office  of  the  secretary 
of  state  until  the  officers  or  directors  of  the  corporation  shall 
have  deposited  with  the  state  treasurer  a  sum  equal  to  at  least 
five  hundred  dollars  for  every  mile,  and  a  proportionate  sum 
for  any  distance  less  than  a  mile,  of  such  branch  which  it  is 
proposed  to  construct,  and  the  said  treasurer  shall  be  custo- 
dian of  such  fund,  and  shall  hold  the  same  subject  to  be  re- 
paid to  the  directors  or  treasurer  of  such  company  in  sums 
of  five  hundred  dollars  for  each  mile,  and  a  proportionate 
sum  for  any  distance  less  than  a  mile,  of  such  branch  upon 
the  construction  of  which  it  shall  be  proved  to  his  satisfaction 
that  such  amount  has  been  expended;  and  provided  further, 
that  the  construction  of  all  such  branches  shall  be  commenced 
within  six  months  from  the  date  of  filing  the  survey  thereof 
as  aforesaid,  and  shall  be  completed  and  opened  within  two 
years  from  the  date  of  the  commencement  of  the  construction 
as  aforesaid. 


CORPORATION    LAW    OF    DELAWARE.  II3 

! 

BRIDGES  AND   PASSAGES. 

Section  113.  It  shall  be  the  duty  of  every  railway  corpo- 
ration organized  under  this  act  to  construct  and  keep  in  re- 
pair good  and  sufficient  bridges  and  passages  over,  under  or 
across  the  said  railway  or  right  of  way  where  any  public  or 
other  road,  street  or  avenue  now  or  hereafter  laid  out  shall 
cross  the  same,  so  that  public  travel  on  the  said  road  shall  not 
be  impeded  thereby;  and  it  is  further  provided,  that  such 
bridges  shall  be  of  such  width  and  character  as  shall  be  suit- 
able to  the  locality  in  which  the  same  are  situated;  and  also 
where  the  said  railway  shall  intersect  any  farm  or  lands  of  any 
individual,  to  provide  and  keep  in  repair  suitable  and  con- 
venient wagonways  over,  under  and  across  the  said  railway, 
and  shall  also  construct  and  maintain  suitable  and  proper 
cattle  guards  at  all  road  crossings;  provided,  always,  that  in 
case  any  such  railway  shall  cross  any  street  or  streets,  high- 
way or  highways,  in  any  city  or  incorporated  town,  it  shall 
be  either  above  or  below  the  grade  of  said  street  or  streets, 
highway  or  highways,  at  such  distance  as  shall  not  interfere 
with  the  free  and  uninterrupted  use  of  such  street  or  streets, 
highway  or  highways;  provided  further,  that  the  council  of 
any  city  or  the  commissioners  of  any  incorporated  town,  or 
other  persons  having  authority  or  control  over  said  highways 
and  streets  respectively,  may  grant  permission  to  said  cor- 
poration to  cross  such  street  or  streets,  highway  or  highways, 
within  the  limits  of  the  respective  city  or  incorporated  town 
at  grade,  if  they  shall  deem  it  to  be  for  the  best  interest  of  the 
city  or  incorporated  town ;  and  further  provided,  that  in  the 
event  that  such  corporation  shall  not,  within  a  reasonable 
time  after  notification  from  the  council  of  the  city  or  com- 
missioners of  the  incorporated  town  or  other  persons  having 
authority  or  control  over  said  highways  and  streets  respec- 
tively in  which  such  bridges  and  passages  are  to  be  con- 
structed or  repaired,  proceed  to  construct  or  repair  the  same 
as  required  by  this  act,  the  said  council  or  commissioners  or 
other  persons  having  authority  or  control  over  said  highways 
8 


114  CORPORATION    LAW    OF    DELAWARE. 

and  streets  respectively,  may  in  the  corporate  name  of  such 
city  or  town,  institute  proceedings  in  the  court  of  chancery 
against  such  corporation  to  compel  the  specific  performance 
of  the  duties  imposed  upon  such  corporation  by  this  section 
of  this  act,  and  in  case  a  decree  shall  be  made  against  such 
corporation  in  said  proceedings,  commanding  it  to  specifi- 
cally perform  said  duties  within  such  time,  the  chancellor, 
upon  proof  of  such  neglect  or  refusal,  may  in  his  discretion 
issue  a  writ  of  injunction  to  restrain  said  corporation  from  the 
exercise  of  any  franchise  or  the  transaction  of  any  business 
in  this  state  until  the  said  corporation  shall  have  obeyed  the 
command  of  such  decree  and  paid  the  costs  of  said  proceed- 
ings ;  and  further  provided,  that  the  said  council  or  commis- 
sioners or  other  persons  having  authority  or  control  over  said 
highways  and  streets  respectively,  in  the  event  of  the  failure 
of  such  corporation  to  construct  or  repair  such  bridges  or 
passages  within  a  reasonable  time  after  notification  as  afore- 
said, may  if  they  deem  it  advisable  so  to  do,  proceed  them- 
selves to  construct  and  repair  such  bridges  or  passages,  and 
when  the  costs  thereof  shall  have  been  ascertained,  the  same 
may  be  collected  of  and  from  said  corporation  by  said  council 
or  commissioners  or  other  persons  having  authority  or  con- 
trol over  said  highways  and  streets  respectively,  by  an  action 
at  law  in  any  court  of  competent  jurisdiction ;  provided 
further,  that  the  permission  of  the  council  of  any  city  or  the 
commissioners  of  any  incorporated  town  or  other  persons 
having  authority  or  control  over  said  highways  and  streets 
respectively,  hereinbefore  referred  to,  shall  not  be  necessary 
for  the  purpose  of  crossing  any  street  or  streets,  highway  or 
highways  at  grade,  unless  said  street  or  streets,  highway  or 
highways,  at  the  point  where  said  railway  shall  cross  or  at 
some  point  between  the  crossing  of  said  railway  and  the  near- 
est terminus  of  said  street  or  streets,  highway  or  highways, 
shall  be  in  actual  use  by  and  for  pedestrians  and  teams  at  the 
time  of  the  acquirement  of  the  right  of  way  of  said  railway 
across  such  street  or  streets,  highway  or  highways. 


CORPORATION    LAW    OF    DELAWARE.  II5 

CBOSSINGS,  ETC. 

Section  114.  That  any  railway  corporation  created  under 
this  act,  which  shall  have  duly  located  the  route  of  its  railway 
by  a  survey  deposited  in  the  office  of  the  secretary  of  state,  as 
required  by  section  112,  shall  have  power  in  the  construction 
of  its  said  railway  on  such  route,  to  cross  any  canal,  navigable 
stream  or  water-course  between  its  termini,  but  in  such  man- 
ner as  not  unnecessarily  to  impede  the  navigation  and  use 
thereof;  and  shall  also  have  power  to  cross  any  railway  or  rail- 
road intervening  between  such  termini  and  acquire  the  neces- 
sary easement  for  such  crossing  either  by  agreement  with  the 
corporation  owner  thereof  or,  on  failure  to  agree,  by  con- 
demnation proceedings  in  the  manner  prescribed  by  section 
78.  Provided,  however,  that  whenever  practicable  so  to  do 
the  crossing  of  any  railroad  at  grade  shall  be  avoided,  but  if 
not  practicable,  the  crossing  may  be  at  grade,  subject  to  the 
further  provision  in  this  section  contained,  and  in  that  event, 
it  shall  be  the  duty  of  the  corporation  whose  railway  track  or 
tracks  shall  cross  the  track  or  tracks  of  the  railroad  company, 
to  so  construct  its  railway  track  or  tracks,  as  that  on  each  side 
of  the  right  of  way  of  the  railroad  company  so  crossed  and 
at  a  safe  and  convenient  distance  therefrom,  there  shall  be 
a  disconnection  in  each  rail  of  the  railway  tracks  capable  of 
being  connected  by  means  of  a  switch  arrangement  whereby 
the  said  railway  tracks  may  be  made  continuous  for  the  pas- 
sage of  the  cars  of  the  railway  company  over  the  right  of  way 
and  tracks  of  the  railroad  company,  which  shall  be  operated 
at  the  expense  of  the  railway  company  by  a  competent  agent 
thereof  who  shall  always  be  on  duty  at  said  crossing  for  this 
purpose ;  and  provided  further,  that  no  such  grade  crossing 
shall  be  permitted  or  effected  until  the  question  of  the  prac- 
ticability of  an  overhead  or  undergrade  crossing  shall  have 
been  considered  and  determined  by  the  chancellor,  who  shall 
upon  the  petition  or  bill  of  the  company,  desiring  to  effect 
such  crossing  at  grade,  have  full  power  and  jurisdiction  upon 


Il6  CORPORATION    LAW    OF    DELAWARE. 

notice  to,  and  answer  by  the  company  whose  tracks  are  pro- 
posed to  be  so  crossed  to  liear,  and,  determine  the  matter  by 
an  appropriate  decree,  either  refusing  or  permitting  the  cross- 
ing at  grade,  and  if  permitted,  to  prescribe  and  regulate  by 
such  decree  the  manner  and  character  of  the  said  crossing, 
together  with  such  safeguards  against  collisions  thereat  in 
addition  to  those  by  this  section  provided  for  as  he  may  deem 
proper  with  the  right  of  appeal  from  the  chancellor's  decree 
to  the  supreme  court  by  either  party  as  in  other  cases  in 
equity ;  and  provided  further,  that  any  railway  may  cross  any 
other  railway  either  at  grade,  or  overhead  or  under  grade 
by  an  adequate  structure,  which,  if  under  grade,  shall  be  so 
located  and  constructed  as  not  to  disturb  the  road-bed  so 
intersected,  or,  if  overhead,  shall  be  at  such  an  elevation  as 
not  to  impede  or  interfere  with  the  free  and  safe  passage  of 
the  cars  on  the  railway  so  crossed. 

LIMITATION   FOR  COMMENCEMENT   AND   COMPLETION. 

Section  115.  That  any  corporation  created  under  this  act 
for  the  purpose  of  constructing  a  railway,  shall  commence  the 
proposed  construction  within  six  months  from  the  date  of 
its  organization  and  complete  at  least,  one  track  of  said  rail- 
way within  two  years  from  the  date  of  commencement,  as 
aforesaid ;  provided,  that  if  any  such  company  or  corporation 
organized  under  this  act  shall  fail  to  comply  with  the  pro- 
visions of  this  section,  it  shall  thereby  forfeit  the  franchises 
given  it  by  this  act ;  provided  further,  that  if  any  such  corpo- 
ration organized  under  this  act,  shall  be  restrained,  prevented 
or  enjoined  by  any  proceedings  whatever  at  law  or  in  equity 
from  prosecuting  the  work  on  its  railway,  or  from  opening  or 
completing  its  said  railway,  the  time  during  which  any  such 
corporation  shall  be  so  restrained,  prevented  or  enjoined  shall 
not  be  taken  or  computed  as  any  part  of  the  time  allowed  and 
limited  in  this  section  for  the  opening  and  completing  of  said 
railway. 


CORPORATION    LAW    OF    DELAWARE.  II7 

BOBBOWING   MONEY,   BONDS,   ETC. 

Section  ii6.  Any  corporation  organized  under  this  act 
for  the  construction  and  operation  of  a  railway,  shall  have 
power  to  borrow  such  sums  of  money,  from  time  to  time,  not 
exceeding  in  the  aggregate  double  the  amount  of  its  full  paid 
capital  stock  as  shall  be  necessary  to  build,  construct  or  re- 
pair its  railway,  and  furnish  all  necessary  cars  and  equipments 
for  the  use  and  objects  of  said  corporation,  and  to  secure  the 
repayment  thereof  by  the  execution,  negotiation  and  sale  of 
any  bond  or  bonds,  secured  by  mortgage  on  said  lands,  priv- 
ileges, franchises  and  appurtenances  of  and  belonging  to  the 
said  corporation,  provided  that  said  corporation  shall  not 
plead  any  statute  or  statutes  against  usury  in  any  court  of  law 
or  equity,  in  any  suit  instituted  to  enforce  the  payment  of  any 
bond  or  mortgage  executed  under  the  provisions  of  this  sec- 
tion ;  and  provided  further,  that  said  bonds  and  mortgages 
shall  constitute  a  first  lien  on  the  railway,  its  cars,  real  estate 
and  franchises  and  the  proceeds  of  said  bonds  shall  be  used  for 
the  purpose  of  aiding  in  the  construction  and  operation  of 
said  railway ;  and  provided  further,  that  if  any  person  or  per- 
sons shall  issue  such  bonds  to  any  greater  amount  than  double 
the  amount,  at  the  time  of  such  issue  that  shall  have  been 
actually  paid  up  on  the  capital  stock  of  such  railway,  he,  she 
or  they,  shall  be  guilty  of  a  misdemeanor  and  shall  be  pun- 
ished by  a  fine  of  not  less  than  two  thousand  dollars,  or  by 
imprisonment  for  not  more  than  three  years,  or  by  both,  at 
the  discretion  of  the  court. 

Section  117.  The  provisions  of  section  84  of  this  act  shall 
be  applicable  to  all  railways  that  may  be  located  and  con- 
structed under  this  act  elsewhere  than  on  turnpikes,  highways 
or  public  roads. 

INJUBY  TO   PBOPEBTY   OF   BOAD,    PENALTY. 

Section  118.  Any  person  who  wilfully  or  maliciously  ob- 
structs any  railway  company  in  the  legal  use  of  its  railway 
track,  or  delays  the  passing  of  the  cars  or  railway  carriages 


Il8  CORPORATION    LAW    OF    DELAWARE. 

thereon  or  aids  or  abets  such  detention  or  delay,  shall  be  pun- 
ished by  a  fine  not  exceeding  fifty  dollars,  to  be  by  it  recov- 
ered in  any  court  having  competent  jurisdiction  in  an  action 
of  debt;  and  further  shall  be  liable  for  all  damages  sustained. 

SIGNAL   BOARDS. 

Section  119.  Every  railway  corporation  formed  under  this 
act  shall  cause  signal  boards,  well  supported  by  posts,  or 
otherwise,  at  such  heights  as  to  be  easily  seen  by  travelers, 
and  not  obstructing  travel,  containing  on  each  side  in  capital 
letters,  at  least  five  inches  high,  the  following  inscription, 
"RAILWAY  CROSSING,"  to  be  placed  and  constantly 
maintained,  at  such  public  highway  where  it  is  crossed  by  the 
railway  at  the  same  level ;  but  such  boards  need  not  be  put 
up  in  the  cities  or  towns,  unless  required  by  the  authorities 
thereof. 

Any  corporation  failing  to  comply  with  or  violating  or  per- 
mitting any  of  its  employes  or  agents  to  violate  any  of  the 
provisions  of  this  section,  shall  in  addition  to  subjecting  itself 
to  any  damages  that  may  be  caused  by  such  failure  or  viola- 
tion, be  guilty  of  a  misdemeanor  and  upon  conviction  thereof, 
be  fined  for  each  failure  or  violation,  not  less  than  one  hun- 
dred dollars  nor  more  than  five  hundred  dollars. 

ANNUAL  REPORT   TO   STOCKHOLDERS. 

Section  120.  It  shall  be  the  duty  of  every  railway  corpo- 
ration created  under  the  provision  of  this  act.  to  make  an  an- 
nual report  to  the  stockholders  of  its  operations  during  the 
year,  which  report  shall  be  verified  by  the  affidavit  of  the  sec- 
retary and  treasurer  and  shall  state : 

The  entire  length  of  the  railway  in  operation,  the  length 
of  single  track  and  the  length  of  double  track. 

The  full  amount  of  the  capital  stock  actually  subscribed 
and  the  full  amount  paid  thereon. 

The  entire  amount  of  the  actual  cost  of  the  railwav.  show- 


CORPORATION    LAW    OF    DELAWARE.  IIQ 

ing  the  amount  expended  for  the  right  of  way,  bridging, 
grading,  iron  and  building  respectively,  and  for  all  other  pur- 
poses incidental  to  the  construction  of  such  railway. 

The  nature  and  amount  of  its  indebtedness,  distinguish- 
ing the  first,  second  and  third  mortgage  bonds,  and  the 
unsecured  indebtedness  and  the  amount  due  the  corpo- 
ration. 

The  amount  received  from  all  sources  whatever  and  the 
full  amount  expended  for  all  purposes. 

The  entire  amount  paid  for  loss  and  damage  to  freight  and 
injury  to  person  and  property. 

The  full  number  and  amount  of  dividends  and  when  made 
and  in  what  manner  such  dividends  have  been  paid. 

The  entire  amount  appropriated  to  sinking  fund  and  the 
manner  in  which  the  same  has  been  applied,  and  the  total 
amount  then  held  by  such  sinking  fund ;  the  secretary  of  each 
railway  corporation,  formed  as  aforesaid,  shall  mail  to  every 
stockholder  thereof,  whose  post-office  address  is  known,  a 
copy  of  said  annual  report  and  shall  file  a  certified  copy  there- 
of with  the  secretary  of  state  on  or  before  the  expiration  of 
fifteen  days. 

MERGER. 

Section  121.  Any  two  or  more  railway  corporations  cre- 
ated under  this  act,  or  any  one  of  such  corporations  and  a 
corporation  now  existing  for  the  construction  and  operation 
of  a  railway,  whose  charter  does  not  prohibit  merger  or  con- 
solidation, may  consolidate  into  a  single  corporation  in  the 
manner  provided  in  section  54  of  this  act,  and  the  other  sec- 
tions hereof  relating  to  the  consolidation  of  corporations,  and 
such  new  corporation  shall  possess  all  the  powers,  rights  and 
privileges  conferred  upon  such  two  or  more  corporations,  and 
shall  be  subject  to  all  the  restrictions  and  liabilities  and  shall 
perform  all  the  duties  imposed  by  the  provisions  of  their  re- 
spective charters,  or  certificates  of  incorporation  not  incon- 
sistent with  the  provisions  of  this  act. 


120         CORPORATION  LAW  OF  DELAWARE. 
FEES  TO  STATE. 

Section  122.  Every  railway  corporation  organized  under 
this  act  shall  be  required,  upon  filing  its  certificate,  to  pay  to 
the  secretary  of  state  the  fees  hereinafter  provided  for;  and 
also  pay  such  tax  or  taxes  as  are  or  may  be  imposed  by  law 
or  by  any  authority  having  jurisdiction. 

PROHIBITED  FROM  USING  STREETS  WHERE  OTHER  TRACK 

IS  LAID. 

Section  123.  That  no  railway  shall  be  authorized  or  em- 
powered hereunder  nor  shall  any  consent  or  authorization  of 
any  board  of  ofBcials,  city,  county  or  hundred,  be  held  to  au- 
thorize any  railway  to  be  constructed,  maintained  or  operated 
upon  any  street  upon  which  any  track  is  now  laid. 

LINES  OF  TELEGRAPH  AND  TELEPHONE  FOR  USE  OF  ROAD. 

Section  124.  That  it  shall  be  lawful  for  every  railroad  or 
railway  corporation  organized  under  the  provisions  of  this 
act  or  existing  under  the  laws  of  this  state  and  they  are  hereby 
authorized  and  empowered  to  erect,  establish  and  maintain 
a  line  or  lines  of  telegraph  or  telephone  for  their  own  use, 
along  and  upon  the  lands  and  right  of  way  of  such  railroad  or 
railway  corporations. 

WORDS  DEFINED 

Section  125.  Whenever  the  words  "directors''  and  "man- 
agers" appear  in  any  of  the  provisions  of  this  act.  they  shall 
be  construed  to  be  synonymous  terms ;  and  whenever  the 
word  "railroad"  occurs  it  shall  be  construed  to  be  a  road,  the 
engines,  cars,  carriages  and  coaches  on  which  are  propelled 
by  steam  power;  and  whenever  the  word  "railway"  occurs, 
it  shall  be  construed  to  be  a  road,  the  cars,  carriages  and 
coaches  on  which  are  propelled  by  electricity,  by  cable,  motor 
or  by  any  improved  motive  power,  other  than  steam. 


CORPORATION    LAW    OF    DELAWARE.  121 

COPIES,  ETC.,  EVIDENCE. 

Section  126.  That  a  copy  of  any  articles  of  association  for 
the  construction  of  railways  filed  and  recorded  in  pursuance 
to  the  provisions  of  this  act,  or  of  the  record  thereof,  with  a 
copy  of  the  affidavit  aforesaid,  endorsed  thereon  or  annexed 
thereto,  and  duly  certified  to  be  a  copy  by  the  secretary  of 
state,  shall  be  presumptive  evidence  of  the  incorporation  of 
such  corporation  and  of  the  facts  therein  stated. 

STATE  FEES  ON  FILING  CERTIFICATES. 

Section  127.  On  filing  any  certificate  or  other  paper,  re- 
lating to  corporations,  in  the  office  of  the  secretary  of  state, 
the  following  fees  and  taxes  shall  be  paid  to  the  secretary  of 
state,  for  the  use  of  the  state ;  for  certificate  of  incorporation 
fifteen  cents  for  each  thousand  dollars  of  the  total  amount 
of  capital  stock  authorized,  but  in  no  case  less  than  twenty 
dollars,  and  when  any  certificate  of  increase  of  the  capital 
stock  shall  be  filed  as  required  by  this  act,  the  secretary  of 
state  shall  demand  and  receive  for  the  use  of  the  state,  fifteen 
cents  on  each  one  thousand  dollars  of  such  increase;  and 
when  two  or  more  corporations  shall  consolidate  or  merge, 
he  shall  demand  and  receive  for  the  use  of  the  state  fifteen 
cents  on  each  one  thousand  dollars  of  capital  authorized  be- 
yond the  total  authorized  capital  of  the  corporations  consol- 
idated or  merged,  but  in  no  case  less  than  twenty  dollars. 

Upon  receiving  and  filing  a  certificate  of  dissolution, 
cliange  of  name,  amended  certificates  of  organization,  (other 
than  those  authorizing  increase  of  capital  stock),  decrease  of 
capital  stock,  increase  or  decrease  of  the  number  of  shares, 
he  shall  demand  and  receive  twenty  dollars.  All  other  cer- 
tificates five  dollars.  Provided  that  in  case  of  corporations 
for  religious,  charitable  or  educational  purposes  the  tax  shall 
not  be  charged  or  collected. 

The  fees  of  the  secretary  of  state  under  this  act  shall  be  as 
follows : 

For  certified  copies,  the  same  as  is  now  provided  by  law  for 


122  CORPORATION    LAW    OF    DELAWARE. 

the  secretary  of  state  for  certificates  and  copying ;  for  receiv- 
ing, filing  and  indexing  certificates,  statements,  affidavits,  de- 
crees, agreements,  surveys,  reports  and  any  other  papers  pro- 
vided for  by  this  act  two  dollars  in  each  case;  for  recording 
and  indexing  certificates,  articles  of  association  and  other 
papers  required  by  this  act  to  be  recorded  by  the  secretary  of 
state  the  same  fees  as  are  now  provided  by  law  for  the  record- 
ing of  deeds. 

For  state  fees  for  filing  the  certificate  of  renewal  of  corpo- 
rate existence  see  section  131,  post. 

SITUS  OF  CAPITAL  STOCK. 

Section  128.  For  all  purposes  of  title,  action,  attachment, 
garnishment,  taxation  and  jurisdiction  of  all  courts  held  in 
this  state,  the  situs  of  the  ownership  of  the  capital  stock  of  all 
corporations  existing  under  the  laws  of  this  state  whether 
organized  under  this  act  or  otherwise,  shall  be  regarded  as  in 
this  state. 

Contrary  to  the  common-law  rule  corporations  are  now  by 
force  of  statute  subject  to  attachment  proceedings:  14  Del. 
Laws.  Ch.  90. 

Under  the  laws  of  Delaware,  stock  in  incorporated  com- 
panies, with  all  the  rights  thereto  belonging,  is  liable  for  the 
satisfaction  of  debts — i.  e.,  to  execution — and  hence  transfers 
of  such  stock  may  be  void  for  fraud  against  creditors :  Col- 
bert V.  Sutton,  5  Del.  Chan.  294. 

There  was  formerly  some  doubt  whether  a  state  could  tax 
or  otherwise  exercise  jurisdiction  over  stock  of  a  domestic 
corporation  owned  by  non-residents.  It  was  strenuously 
urged  that  shares  of  stock  have  no  situs  at  the  domicile  of  the 
corporation  but  follow  the  domicile  of  the  stockholder,  and 
such  was  the  common-law  rule,  but  it  is  now  well  settled  that 
a  statute  may  be  enacted  by  the  state  creating  the  corporation, 
giving  to  shares  of  stock  a  situs  at  the  location  of  the  corpora- 
tion, and  this  whether  the  stock  be  held  by  residents  or  non- 
residents of  the  state. 

See  Cook  on  Corporations,  section  566. 


CORPORATION    LAW    OF    DELAWARE.  1 23 

Thus  it  has  been  held  that  a  state  may  tax  the  stock  of  a 
domestic  corporation  owned  by  a  non-resident. 

Ottawa  Glass  Co.  v.  ]\IcCaleb.  81  111.  556;  Bradley  t'.  Bander.  36  Ohio 
St.  28;  Tappan  v.  Merchants'  Nat.  Bank,  19  Wall.  490;  Whitney  v. 
Ragsdale,  33  Ind.  107;  Mayor,  etc.,  Bait.  v.  Bait.,  etc.,  R.  R..  57  Md.  31; 
First  Natl.  Bank  v.  Smith,  65  111.  44;  American  Coal  Co.  z\  County 
Comrs.,  59  Md.  185.  The  common-law  rule  is  well  expressed  in  Union 
Bank  i'.  State,  9  Yerg.  (Tenn.)  490. 

It  seems  also  to  be  settled  that  stock  in  a  corporation  is 
subject  to  attachment  proceedings  only  in  the  domicile  of  the 
corporation. 

A  defendant's  shares  of  stock  cannot  be  reached  by  levy 
of  attachment  in  an  action  commenced  outside  of  the  state 
wherein  the  corporation  is  incorporated. 

Thus  it  was  held  in  Smith  v.  Downey,  8  Ind.  App.  179,  that 
a  citizen  of  Indiana  could  not  attach  certificates  of  stock 
owned  by  a  non-resident  in  a  Colorado  corporation,  even 
though  the  certificates  were  in  the  state  of  Indiana  and  within 
the  jurisdiction  of  the  court. 

And  in  Winslow  v.  Fletcher,  53  Conn.  390,  the  court  said 
that  stock  in  a  corporation,  for  the  purposes  of  attachment, 
has  its  situs  where  the  corporation  is  located.  See  also 
Christmas  z'.  Biddle,  13  Pa.  St.  223.  Cook  on  Corp.,  sec- 
tion 485. 

RENEWAL  AND  EXTENSION  OF   CORPORATE  EXISTENCE. 

Section  129.  Any  corporation,  existing  under  the  laws  of 
this  state,  ma}^  at  any  time  before  the  expiration  of  the  time 
limited  for  its  existence,  procure  a  renewal  of  its  charter  for 
any  period,  together  with  all  the  rights,  franchises,  privileges 
and  immunities,  and  subject  to  all  its  existing  debts,  duties 
and  liabilities,  secured  or  imposed  by  its  then  existing  charter, 
by  filing  a  certificate  of  its  president  and  secretary,  duly  sworn 
or  ai^rmed  to  by  such  officer  before  any  person  authorized  by 
the  laws  of  this  state  to  administer  oaths  or  affirmations,  with 
the  secretary  of  state :  which  certificate  shall  set  forth : 

1.  The  name  of  the  corporation,  which  shall  be  the  existing 
name  of  said  corporation  at  the  time  of  such  renewal : 

2.  The  name  of  the  city,  town  or  place  within  the  county  in 


124  CORPORATION    LAW    OF    DELAWARE. 

which  its  principal  office  or  place  of  business  is  located  in  this 
state. 

3.  The  date  when  such  renewal  is  to  commence,  which  date 
shall  be  prior  to  the  date  of  the  expiration  of  the  charter  de- 
sired to  be  renewed,  whether  or  not  such  renewal  is  to  be  per- 
petual, and,  if  not  perpetual,  the  time  for  which  such  renewal 
is  to  continue : 

4.  That  the  corporation  desiring  to  renew  and  so  renewing 
its  charter  is  duly  organized  and  carrying  on  the  business  au- 
thorized by  its  existing  charter. 

It  should  be  carefully  noted  that  as  a  pre-requisite  to  the  re- 
newal provided  for  in  this  section,  the  corporation  must  file 
with  the  secretary  of  state  an  acceptance  of  the  provisions  of 
the  constitution  of  1897:    Const.,  article  ix,  section  2. 

FILING  CERTIFICATE  OF  RENEWAL  AND  RECORDING  COPY. 

Section  130.  Such  certificate  for  the  renewal  and  continu- 
ance of  the  existence  of  any  such  corporation  shall  be  filed  in 
the  office  of  the  secretary  of  state,  who  shall  furnish  a  certified 
copy  of  the  same  under  his  hand  and  seal  of  office ;  said  cer- 
tified copy  shall  be  recorded  in  the  office  of  the  recorder  of 
the  county  in  which  the  principal  office  of  said  corporation  is 
located  in  this  state,  in  a  book  kept  for  the  purpose ;  and  said 
certificate  or  a  certified  copy  thereof  duly  certified  under  the 
hand  of  the  secretary  of  state  and  his  seal  of  office  accom- 
panied with  the  certificate  of  the  recorder  of  the  county 
wherein  the  same  is  recorded  under  his  hand  and  seal  of  his 
office,  stating  that  it  has  been  recorded,  the  record  of  the 
same  in  the  office  of  the  recorder  aforesaid,  or  a  copy  of  said 
record  duly  certified  by  the  recorder  aforesaid,  or  the 
record  of  such  certified  copy  recorded  in  the  recorder's  office 
aforesaid,  shall  be  evidence  in  all  courts  of  law  and  equity  of 
this  state. 

STATE  TAX  ON  RENEWAL. 

Section  131.  Upon  the  renewal  of  the  existence  of  any 
corporation  it  shall  pay  to  the  secretary  of  state,  for  the  use 


CORPORATION    LAW    OF    DELAWARE.  1 25 

of  the  State,  a  tax  of  twenty  dollars  before  the  delivery  of  a 
certified  copy  of  its  certificate  of  renewal  by  him  to  it. 

EFFECT  OF  RENEWAL. 

Section  132.  Any  corporation,  desiring  to  renew,  extend 
and  continue  its  corporate  existence,  shall  upon  complying 
with  the  provisions  of  sections  129,  130  and  131  of  this  act, 
and  with  the  provisions  of  section  2  of  article  ix  of  the  con- 
stitution of  this  state,  be  and  continue  for  the  time  stated,  in 
its  certificate  of  renewal  a  corporation  and  shall,  in  addition 
to  the  rights,  privileges  and  immunities  conferred  by  its  orig- 
inal charter,  possess  and  enjoy  all  the  benefits  of  this  act, 
which  are  applicable  to  the  nature  of  its  business,  and  shall  be 
subject  to  the  restrictions  and  liabilities  by  this  act  imposed 
on  such  corporations. 

POWER  TO  HOLD  STOCK  AND   SECURITIES   OF   OTHER  COR- 
PORATIONS. 

Section  133.  Any  corporation  created  under  the  pro- 
visions of  this  act  may  purchase,  hold,  sell,  assign,  transfer, 
mortgage,  pledge  or  otherwise  dispose  of,  the  shares  of  the 
capital  stock  of,  or  any  bonds,  securities  or  evidence  of  in- 
debtedness created  by  any  other  corporation  or  corporations 
of  this  state  or  any  other  state,  country,  nation  or  govern- 
ment, and  while  owner  of  said  stock  may  exercise  all  the 
rights,  powers  and  privileges  of  ownership  including  the  right 
to  vote  thereon. 

A  corporation  may  acquire  by  purchase  all  the  stock  of  another  corpo- 
ration, and  yet  the  latter  may  continue  a  distinct  and  existing  organiza- 
tion, with  its  own  officers  and  board  of  directors:  Einstein  v.  Rochester 
Gas  &  Electric  Co.,  146  N.  Y.  46. 

A  corporation  may  vote  shares  in  another  corporation  in  which  it  is  a 
stockholder  by  a  proxy  duly  authorized:  State  v.  Rohlfifs,  ig  Atl.  Rep. 
1099. 

A  corporation  cannot  in  its  own  name  subscribe  for  stock,  (jr  bo  a  cor- 
porator under  the  general  railroad  law;  nor  can  it  do  so  by  simulated  com- 
pliance with  the  provisions  of  the  law   through   its  agents  as   ju-etended 


126  CORPORATION    LAW    OF    DELAWARE. 

corporators  and  subscribers  for  stock:    Central  R.  R.  Co.  of  N.  J.  i\  Pa. 
R.  R.  Co.,  31  N.  J.  Eq.  475-494- 

A  corporation  has  no  power  to  hold  stock  in  another  corporation  unless 
authorized  by  its  charter:    Cook  on  Stocks,  etc.,  section  315. 

AMENDMENT  OF  CERTIFICATE  BEFORE   PAYMENT  OF  CAP- 
ITAL STOCK. 

Section  134.  It  shall  be  lawful  for  the  incorporators  of  any 
corporation,  before  the  payment  of  any  part  of  its  capital,  to 
file  with  the  secretary  of  state,  an  amended  certificate,  duly 
signed  by  the  incorporators  named  in  the  original  certificate 
of  incorporation,  and  duly  acknowledged  in  the  manner  in 
this  act  required  for  certificates  of  incorporation,  in  this  act 
heretofore  provided  for.  modifying,  changing  or  altering  its 
original  certificate  of  incorporation  in  whole  or  in  part ;  said 
secretary  of  state  shall  furnish  a  certified  copy  of  said  certifi- 
cate under  his  hand  and  seal  of  office,  and  said  certified  copy 
shall  be  recorded  in  the  office  of  the  recorder  of  the  county  in 
which  its  original  certificate  of  incorporation  was  recorded : 
said  amended  certificate  shall  take  the  place  of  the  original 
certificate  of  incorporation,  and  shall  be  deemed  to  have  been 
filed  and  recorded  on  the  date  of  the  filing  and  recording  of 
the  original  certificate ;  provided,  however,  that  nothing 
herein  contained  shall  permit  the  insertion  of  any  matter  not 
in  conformity  with  the  provisions  of  this  act.  For  filing  any 
such  amended  certificate  of  incorporation  the  secretary  of 
state  shall  receive  for  the  use  of  the  state,  a  tax  of  twenty  dol- 
lars, and  if  the  capital  stock  of  the  corporation  is  increased 
by  any  such  amended  certificate  he  shall  receive,  as  aforesaid, 
an  additional  sum  of  fifteen  cents  for  each  one  thousand  dol- 
lars of  increase. 

AMENDMENT  OF  CERTIFICATE  AFTER  ORGANIZATION. 

Section  135.  Every  corporation  organized  under  this  act 
may  change  the  nature  of  its  business,  change  its  name,  change 
the  par  value  of  the  shares  of  its  capital  stock,  change  the 
location  of  its  principal  office  in  this  state,  extend  its  corpo- 


CORPORATION    LAW    OF    DELAWARE.  1 27 

rate  existence,  create  one  or  more  classes  of  preferred  stock, 
and  make  such  other  amendments,  change  or  alteration  as 
may  be  desired,  in  manner  following : 

The  board  of  directors  shall  pass  a  resolution  declaring  that 
such  change  or  alteration  is  advisable  and  calling  a  meeting 
of  the  stockholders  to  take  action  thereon ;  the  meeting  shall 
be  held  upon  such  notice  as  the  by-laws  provide,  and  in  the 
absence  of  such  provision,  upon  ten  days'  notice,  given  per- 
sonally or  by  mail ;  if  two-thirds  in  interest  of  each  class  of 
the  stockholders  having  voting  power  shall  vote  in  favor  of 
such  amendment,  change  or  alteration,  a  certificate  thereof 
shall  be  signed  by  the  president  and  secretary  under  the  cor- 
porate seal,  acknowledged  by  said  president  and  secretar>% 
before  any  ofificer  authorized  by  the  laws  of  this  state  to  take 
acknowledgment  of  deeds,  to  be  the  act,  deed  and  certificate 
of  such  corporation.  And  such  certificate  acknowledged  as 
aforesaid,  together  with  the  assent  in  person  or  by  proxy,  of 
two-thirds  in  interest  of  each  class  of  such  stockholders,  shall 
be  filed  in  the  office  of  the  secretary  of  state,  and  a  copy  there- 
of duly  certified  by  the  secretary  of  state  shall  be  recorded 
in  the  office  of  the  recorder  of  the  county  in  which  the  orig- 
inal certificate  of  incorporation  is  recorded,  and  upon  so  filing 
and  recording  the  same,  the  certificate  of  incorporation  shall 
be  deemed  to  be  amended  accordingly ;  provided  that  such 
certificate  of  amendment,  change  or  alteration  shall  contain 
only  such  provisions  as  it  would  be  lawful  and  proper  to  insert 
in  an  original  certificate  of  incorporation  made  at  the  time 
of  making  such  amendment,  and  the  certificate  of  the  secre- 
tary of  state  that  such  certificate  and  assent  have  been  filed  in 
his  office,  the  record  of  the  same  in  the  office  of  the  recorder 
aforesaid,  or  a  copy  of  said  record  duly  certified  by  the  re- 
corder aforesaid,  shall  be  taken  and  accepted  as  evidence  of 
such  change  or  alteration  in  all  courts  and  places. 

All  such  amendments  or  changes  are  subject  to  the  proviso 
that  they  shall  not  lessen  or  impair  the  liability  of  the  corpo- 


128  CORPORATION    LAW    OF    DELAWARE. 

ration,  or  the  stockholders  or  officers  thereof,  or  the  rights 
or  remedies  of  creditors  thereof.    (Section  58,  ante.) 

While  it  would  appear  that  this  section  provides  for  all  pos- 
sible amendments,  including  apparently  the  power  to  increase 
or  decrease  the  capital  stock  by  the  words,  "and  make  such 
other  amendments,  change  or  alteration  as  may  be  desired," 
it  should  be  noted  that  sections  28  and  ^^  respectively 
contain  specific  provisions  for  the  increase  and  reduction  of 
capital  stock,  which  sections  together  with  the  above  should 
be  carefully  followed  in  making  these  particular  amend- 
ments. 

There  is  a  possible  conflict  or  inconsistency  between  this 
section  and  section  10,  ante;  it  would  seem  advisable  under 
this  later  section  to  make  an  amending  certificate  conform  as 
closely  as  possible  to  the  original  certificate ;  for  example,  the 
certificate  of  acknowledgment  should  state  that  "the  facts 
therein  stated  are  truly  set  forth,"  a  statement  which  is  not 
required  by  section  135,  but  is  required  in  the  original  by  sec- 
tion 9,  ante. 

Section  129  provides  a  method  by  which  "any  corporation 
existing  under  the  laws  of  this  state"  may  extend  its  corporate 
existence  by  the  mode  therein  contained,  which  is  less  cum- 
bersome than  that  provided  for  by  this  section. 

MEETINGS  OF  STOCKHOLDERS.     MUST  MAINTAIN  PRINCIPAL 
OFFICE  IN  DELAWARE. 

Section  136.  That  in  all  cases  where  it  is  not  otherwise 
provided  by  the  by-laws,  the  meetings  of  the  stockholders 
of  every  corporation  in  this  state  shall  be  held  at  its  principal 
office  in  this  state ;  the  directors  may  hold  their  meetings,  and 
have  an  office  or  offices  outside  of  this  state,  if  the  by-laws 
or  certificate  of  incorporation  so  provide;  and  every  corpo- 
ration shall  maintain  a  principal  office  or  place  of  business  in 
this  state,  and  have  an  agent  resident  of  this  state  in  charge 
thereof. 

See  section  17,  ante,  and  notes. 

A.  corporation  is  deemed  a  resident  of  the  county  where  its  principal 
business  office  is  located:  Conroe  v.  The  Nat.  Pro.  Ins.  Co.,  10  How.  Pr. 
405;  Rossie  Iron  Works  r>.  Westbrook,  36  N.  Y.  St.  Rep.  555. 


CORPORATION  LAW  OF  DELAWARE.  12g 

KINDS  OF  STOCK.   DIRECTORS'  VALUATION  OF  PROPERTY 

CONCLUSIVE. 

Section  137.  Every  corporation  shall  have  power  to  create 
two  or  more  kinds  of  stock  of  such  classes,  with  such  desig- 
nations, preferences  and  voting  powers,  or  restriction  or  qual- 
ification thereof,  as  shall  be  stated  and  expressed  in  the  cer- 
tificate of  incorporation;  and  the  power  to  increase  or  de- 
crease the  stock,  as  in  this  act  elsewhere  provided,  shall  apply 
to  all  or  any  of  the  classes  of  stock ;  but  at  no  time  shall  the 
total  amount  of  the  preferred  stocks  exceed  two-thirds  of  the 
actual  capital  paid  in  cash  or  property ;  and  such  preferred 
stock  may,  if  desired,  be  made  subject  to  redemption  at  not 
less  than  par,  at  a  fixed  time  and  place,  to  be  expressed  in  the 
certificate  thereof;  and  the  holders  thereof  shall  be  entitled 
to  receive,  and  the  corporators  shall  be  bound  to  pay  thereon 
a  fixed  yearly  dividend,  to  be  expressed  in  the  certificate,  not 
exceeding  eight  per  centum  payable  quarterly,  half  yearly 
or  yearly,  before  any  dividend  shall  be  set  apart  or  paid  on 
the  common  stock,  and  such  dividends  may  be  made  cumu- 
lative ;  and  in  no  event  shall  a  holder  of  preferred  stock  be  per- 
sonally liable  for  the  debts  of  the  corporation ;  but  in  case 
of  insolvency  its  debts  or  other  liabilities  shall  be  paid  in  pre- 
ference to  the  preferred  stock,'''  unless  its  original  certificate 
of  incorporation  shall  otherwise  provide,  no  corporation  shall 
create  preferred  stock,  except  by  authority  given  to  the  board 
of  directors  by  a  vote  of  at  least  two-thirds  of  the  stock  voted 
at  a  meeting  of  the  cornmon  stockholders,  duly  called  for  that 
purpose ;  the  terms  "general  stock"  and  "common  stock"  are 
synonymous.  When  any  corporation  shall  issue  stock  for 
labor  done  or  personal  property  or  real  estate  or  leases 
thereof,  in  the  absence  of  fraud  in  the  transaction  the  judg- 
ment of  the  directors  as  to  the  value  of  such  labor,  property, 
real  estate  or  leases  shall  be  conclusive. 

See  section  27,  ante,  and  notes. 

The  possession  of  the   certificate  by  the   person   in   whose   name   it   is 

*  So  punctuated  in  the  original  act. 
9 


130  CORPORATION    LAW    OF    DELAWARE, 

issued  creates  a  legal  presumption  of  rightful  ownership,  which  can  only 
be  overcome  by  proof  that  it  was  illegally  issued  or  legally  forfeited: 
Downing  r.  Potts,  2Z  N.  J.  Law.  66.  79. 

The  holding  and  owning  of  a  share  of  common  stock  gives  a  right 
which  cannot  be  divested  without  the  assent  of  the  owner  and  holder,  or 
unless  the  power  so  to  do  has  been  reserved  in  some  way:  Mech.  Bank 
V.  N.  Y.  &  N.  H.  R.  R.  Co..  13  N.  Y.  599- 

The  vested  right  of  a  holder  of  common  stock  cannot  be  taken  from 
him  without  his  consent:    Hayes  v.  Commonwealth.  82  Penn.  St.  Rep- 5 18. 

The  intention  of  the  legislature  is  to  divide  stock  into  classes: 

First,  common  or  general  without  preferences  of  any  kind. 

Second,  stock  with  preferences. 

Stock  of  the  last  class  may  be  of  various  kinds,  may  be  preferred  as 
to  dividends,  as  to  capital  (either  or  both)  or  otherwise.  Such  stock  may 
have  a  restriction  or  qualification  of  voting  powers.  The  power  to  vote 
may  be  wholly  taken  from  any  class  of  stock:  Miller  v.  Ratterman.  24 
N.  E.  Rep.  496  (Ohio,  1890). 

This  stock  with  preferences  may  have  any  name  and  designation  that 
the  stockholders  see  fit  to  give  to  it.  The  restriction  in  the  statute  means 
that  every  company  must  always  have  at  least  one-third  of  the  stock 
issued  and  outstanding,  full  paid  common  stock. 

The  terms  of  these  preferences  and  qualifications  and  restrictions  must 
be  stated  in  the  certificate  of  incorporation,  and  it  is  wise  to  insert  them 
as  well  in  the  certificates  of  stock  in  order  that  there  may  be  no  question 
about  the  holder's  having  full  notice  of  the  terms,  conditions  and  limita- 
tions of  the  stock. 

One  more  suggestion  is  pertinent.  All  preferences  as  to  dividends 
and  guarantees  of  dividends  are  contingent;  they  must  be  made  payable 
only  out  of  the  net  profits  of  the  company  and  can  be  paid  in  no  other 
way. 

They  are  not  a  debt  of  the  company  to  the  stockholders  until  after 
the  net  profit  has  been  made  and  the  surplus  arising  therefrom  is  in  hand 
and  applicable  to  the  payment  of  dividends. 

See  Dill's  Private  Companies. 

"/;z  the  absence  of  fraud  in  the  transaction  the  judgment  of  the 
directors  as  to  the  value  of  sucli  labor,  property,  real  estate  or 
leases  shall  be  conclusive.^' 

To  the  extent  to  which  these  words  protect  holders  of  stock 
issued  for  labor  done  or  property  purchased,  the  law  of  Dela- 
ware is  different  from  that  of  other  states. 

In  making  the  judgment  of  the  directors  as  to  the  value 
of  the  property  purchased  conclusive  the  question  of  the  value 
of  the  property  for  which  the  stock  was  issued  is  removed  as 
an  element  of  danger  to  the  stockholders,  except  so  far  as 
gross  over-valuation  is  evidence  of  fraud  in  the  transaction. 


CORPORATION    LAW    OF    DELAWARE.  I3I 

The  precise  meaning  of  the  words  above  quoted  has  not 
yet  been  passed  upon  by  the  courts. 

It  is  thought  that  the  statute  protects  the  stockholder  from 
many  of  the  attacks  which  may  be  made  upon  him  under  the 
statutes  of  other  states,  notably  that  of  the  state  of  Maine, 
where  a  judgment  creditor  of  the  corporation  recovered  in 
an  action  at  law  against  a  stockholder  upon  the  theory  that 
his  subscription  was  unpaid,  the  finding  of  fact  being  that  the 
property  was  not  of  the  value  for  w^hich  the  stock  was  issued : 
Libby  z'.  Tobey.  19  Atl.  Rep.  904. 

Commenting  upon  this  decision  Mr.  Cook  says:  "Maine 
formerly  was  a  resort  for  incorporations,  but  a  recent  de- 
cision of  her  highest  court,  holding  stockholders  liable  on 
stock  which  has  been  issued  for  property  where  the  court 
thought  the  property  was  not  worth  the  par  value  of  the 
stock,  makes  Maine  too  dangerous  a  state  to  incorporate  in, 
especially  where  millions  of  dollars  of  stock  are  to  be  issued 
for  mines,  patents,  and  other  choice  assortments  of  property :" 
Cook  on  Stock  and  Stockholders,  section  935. 

It  may  be  safely  asserted  that  holders  of  stock  in  Delaware 
corporations  issued  for  property  purchased  or  labor  done  can- 
not be  held  liable  on  any  such  grounds,  in  the  absence  of 
fraud  in  the  transaction. 

In  New  Jersey  it  is  held  that  "To  justify  a  corporation  in  issuing  stock 
under  our  act  for  property  purchased,  there  should  be  an  approximation 
at  least  in  true  value  of  the  thing  purchased  to  the  amount  of  the  stock 
which  it  i^  supposed  it  represents:"  Edgerton  v.  Electric  Improvement, 
etc..  Co..  50  N.  J.  Eq.  .^54.     Decided  in  1892. 

See  also  Rural  Homestead  Co.  v.  Wildes,  54  N.  J.  Eq.  668.  Also  Mere- 
dith et  a).  V.  N.  J.  Zinc  &  Iron  Co.,  37  Atl.  Rep.  539. 

The  good-will  of  a  business  is  property,  and  stock  may  be  issued  for 
it.  And  one  who  participated  in  and  approved  the  method  of  valuation 
of  such  good-will  cannot  afterwards  claim  that  the  good-will  so  bought 
by  the  corporation  was  overvalued:  Washburn  v.  Natl.  Wall  Paper  Co.. 
81  Fed.  Rep.  17. 

Lord  Chancellor  Cairns  says: 

"I  do  not  say  that  the  owner  of  property  might  not  promote  and  form 
a  joint  stock  company  and  then  sell  his  property  to  it.  but  I  do  say  that 
if  he  does  he  is  bound  to  take  care  that  he  sells  it  to  the  company  through 
the  medium  of  a  board  of  directors,  who  can  and  do  exercise  an  inde- 
pendent and  intelligent  judgment  on  the  transaction,  and  who  are  not 
left  under  the  belief  that  the  property  belongs,  not  to  the  promoters,  but 
to  some  other  persons:"  Erlanger  v.  New  Sombrero  Phosphate  Co.,  3 
App.  Cas.  I2r8.  1236:  ?.  c.  6.  English  Ruling  Cases,  p.  777. 


132  CORPORATION    LAW    OF    DELAWARE. 

In  New  Jersey  again  the  earlier  cases  held  that  the  contract  of  the 
subscribers  could  only  be  fulfilled  by  payment  in  money.  In  later  cases 
this  doctrine  has  been  relaxed,  and  stock  issued  and  paid  up  in  work  and 
labor,  or  in  the  purchase  of  property  the  corporation  is  authorized  to 
hold,  has  been  held  to  have  been  legally  issued:  Wetherbee  v.  Baker,  35 
N.  J.  Eq.  501,  512. 

In  the  case  of  Franklin  Coit,  Admr.,  v.  North  Carolina 
Gold  Amalgamating  Co.  et  al.,  an  action  was  brought  by  a 
judgment  creditor  of  a  corporation  to  compel  stockholders 
to  pay  what  was  claimed  to  be  due  on  the  shares  held  by  them, 
it  was  held :  That,  where  the  charter  authorized  capital  stock 
to  be  paid  in  property,  and  the  shareholders  honestly  and  in 
good  faith  put  in  property,  instead  of  money,  in  payment  of 
their  subscriptions,  third  parties  have  no  ground  of  com- 
plaint. Mr.  Justice  Field  in  delivering  the  opinion  of  the 
court  says :  "The  plaintiff  contends,  and  it  is  the  principal 
basis  of  his  suit,  that  the  valuation  thus  put  upon  the  prop- 
erty was  illegally  and  fraudulently  made  at  an  amount  far 
above  its  actual  value;  averring  that  the  property  consisted 
only  of  a  machine  for  crushing  ores,  the  right  to  use  a  patent 
called  the  Crosby  process,  and- the  charter  of  the  proposed 
organization ;  that  the  articles  had  no  market  or  actual  value 
and  therefore,  that  the  capital  stock  issued  thereon  was  not 
fully  paid,  or  paid  to  any  substantial  extent,  and  that  the  hold- 
ers thereof  were  still  liable  to  the  corporation  and  its  creditors 
for  the  unpaid  subscription. 

"If  it  were  proved  that  actual  fraud  was  committed  in  the 
payment  of  the  stock,  and  that  the  complainant  had  given 
credit  to  the  company  from  a  belief  that  its  stock  was  fully 
paid,  there  would  undoubtedly  be  suf^cient  ground  for  the 
relief  asked.  But  where  the  charter  authorizes  capital  stock 
to  be  paid  in  property,  and  the  shareholders  honestly  and  in 
good  faith  put  in  property  instead  of  money,  in  payment  of 
their  subscriptions,  third  parties  have  no  ground  of  com- 
plaint. The  case  is  very  different  from  that  in  which  sub- 
scriptions to  stock  are  payable  in  cash,  and  where  only  a  part 
of  the  instalments  has  been  paid.  In  that  case  there  is  still 
a  debt  due  to  the  corporation,  which,  if  it  become  insolvent, 
may  be  sequestered  in  equity  by  the  creditors,  as  a  trust  fund 
liable  to  the  payment  of  their  debts.  But  where  full  paid 
stock  is  issued  for  property  received  there  must  be  actual 
fraud  in  the  transaction,  to  enable  creditors  of  the  corpora- 


CORPORATION    LAW    OF    DELAWARE.  1 33 

tion  to  call  the  stockholders  to  account.  A  gross  and  ob- 
vious over-valuation  of  property  would  be  strong  evidence  of 
fraud:"    119  U.  S.  343. 

See  also  Boynton  z'.  Hatch.  47  N.  Y.  225;  Van  Cott  z'.  Van  Brunt,  82 
N.  Y.  535;  Carr  z-.  Le  Fevre,  27  Penna.  State.  413:  Fogg  z'.  Blair,  ijg 
U.  S.  118;  Liebke  z'.  Knapp,  79  Mo.  22. 

Where  a  mining  and  manufacturing  corporation  was  organized  under 
the  New  Jersey  corporation  act  of  1875.  which  provides  for  the  purchase 
of  property  with  stock,  such  provision  became  a  part  of  the  contract  be- 
tween the  stockholders;  and  where  new  stock  was  issued  for  the  purchase 
of  mines,  which  will  become  a  part  of  the  common  property  from  which 
all  stockholders  will  receive  the  same  benefit,  original  holders  cannot  in- 
sist that  the  new  stock  shall  be  issued  to  them  in  the  proportion  their 
holdings  bear  to  the  whole  amount  of  stock  before  the  increase:  Mere- 
dith V.  New  Jersey  Z.  &  I.  Co..  :i7  Atl.  Rep.  539. 

AMENDMENTS  TO  PBE-EXISTING  CORPORATIONS. 

Section  138.  Any  corporation  of  this  state  existing  at  the 
time  this  act  becomes  a  law,  whether  created  by  special  act  of 
the  legislature  or  general  law,  may  change  the  nature  of  its 
business,  be  permitted  to  hold  real  and  personal  property  of  a 
greater  or  less  amount  in  value,  increase  or  decrease  its  cap- 
ital stock,  change  its  name,  change  the  par  value  of  the  shares 
of  its  capital  stock,  change  the  location  of  its  principal  office 
or  place  of  business  in  this  state,  and  fix  any  method  of  alter- 
ing its  by-laws  permitted  by  any  law  of  this  state,  in  the  man- 
ner prescribed  in  section  135  of  this  act,  and  any  corporation 
may  in  the  same  manner  relinquish  one  or  more  branches  of 
its  business  or  extend  its  business  to  such  branches  as  might 
have  been  inserted  in  its  original  charter  or  certificate  of  in- 
corporation, not  contrary  to  the  laws  of  this  state. 

See  section  58.  ante. 

It  was  doubtless  the  intention  of  the  legislature  by  this  sec- 
tion to  give  this  power  of  amendment  to  all  pre-existing  cor- 
porations, with  or  without  a  capital  stock,  but  dif^culty 
arises  in  the  reference  to  section  135,  which  furnishes  the 
modus  operandi  for  obtaining  the  amendments  authorized  by 
this  section,  in  that  the  proposed  amendments  nuist,  by  sec- 


J  34  CORPORATION    LAW    OF    DELAWARE. 

tion  J  35.  be  ratified  by  two-thirds  in  interest  of  the  stock- 
holders. 

Can,  therefore,  a  pre-existing  non-stock  corporation  amend 
its  charter? 

It  is  probable  that  such  power  of  amendment  would  be 
upheld  by  the  courts  on  the  ground  that  this  section  confers 
without  qualification  the  right  to  such  amendments,  while 
section  135  merely  points  out  the  method  of  effectuating  such 
right. 

Being  in  the  nature  of  a  guide-post  for  this  section,  there- 
fore, section  135  is  to  be  followed  exactly  where  it  is  applica- 
ble, but  in  other  cases,  only  generally  and  by  analogy. 

It  would  hardly  be  held  to  defeat  a  right  granted  by  this 
section. 

INCONSISTENT  LAWS  REPEALED. 

Section  139.  All  laws  or  parts  of  laws  inconsistent  with 
the  provisions  of  this  act,  are  hereby  repealed;  provided, 
however,  that  all  rights,  privileges  and  immunities  vested  or 
accrued  by  and  under  prior  laws,  all  suits  pending,  all  rights 
of  action  conferred,  and  all  duties,  restrictions,  liabilities  and 
penalties  imposed  or  required  by  and  under  laws  prior  hereto 
shall  not  be  impaired,  diminished  or  affected  herebv. 


FRANCHISE     TAX. 

An  Act  to  Raise  Revenue  for  the  State  by  Taxing  Certain 
Corporations. 

APPROVED  MARCH  10,  1899. 

Section  i.  That  every  telegraph,  telephone,  cable  or  elec- 
tric light  company,  or  company  organized  for  the  distribution 
of  electricity,  heat  or  power,  or  organized  for  the  purpose 
of  producing  or  distributing  steam,  heat  or  power,  every  ex- 
press company,  not  owned  by  a  railroad  company  and  not 
otherwise  taxed,  every  company  organized  for  the  purpose 
of  the  production,  distribution,  or  sale  of  gas,  every  parlor, 


CORPORATION    LAW    OF    DELAWARE.  135 

palace,  or  sleeping  car  company,  every  oil  or  pipe  line  com- 
pany, every  life  insurance  company,  every  fire,  marine,  live 
stock,  casualty  or  accident  insurance  company,  except  mu- 
tual fire  insurance  companies  which  do  not  issue  policies  on 
the  stock  plan,  hereafter  incorporated  under  the  laws  of  this 
state,  shall  pay  an  annual  tax,  for  the  use  of  the  state  by  way 
of  a  license  for  its  corporate  franchise  as  hereinafter  men- 
tioned; provided,  however,  that  no  company  or  society  shall 
be  construed  to  be  a  life  insurance  company  within  the  pur- 
view of  this  act,  which,  by  its  certificate  of  incorporation  shall 
have  for  its  object,  the  assistance  of  sick,  needy  or  disabled 
members,  the  defraying  of  funeral  expenses  of  deceased  mem- 
bers, or  to  provide  for  the  wants  of  the  widows  and  families 
of  members  after  death. 

ANNUAL  KEPORT  OF  CORPORATIONS. 

Section  2.  That  on  or  before  the  first  Tuesday  of  January 
next  and  annually  thereafter,  it  shall  be  the  duty  of  the  presi- 
dent, treasurer  or  other  proper  officer  of  every  corporation 
hereafter  incorporated  of  the  character  specified  in  the  pre- 
ceding section,  to  make  report  to  the  secretary  of  state, 
stating  specifically  the  following  particulars,  namely:  Each 
telegraph,  telephone,  cable  or  express  company  not  owned 
by  a  railroad  company  and  not  otherwise  taxed,  shall  state 
the  gross  amount  of  its  receipts  from  business  done  in  this 
state  for  the  year  preceding  the  making  such  report ;  each 
gas  company  and  electric  light  company  shall  state  the 
amount  of  its  receipts  for  light  or  power  supplied  within  this 
state  for  the  year  preceding  the  making  of  each  report,  and 
the  amount  of  dividends  declared  or  paid  during  the  same 
time ;  each  company  organized  for  the  distribution  of  heat  or 
power  or  organized  for  the  purpose  of  producing  or  distrib- 
uting steam,  heat  or  power,  shall  state  the  amount  of  its  re- 
ceipts for  the  distribution  of  heat  or  power,  or  for  the  pro- 
duction or  distribution  of  steam,  heat  or  power  within  this 
state  for  the  year  preceding  the  making  of  such  report,  and 


1^6  CORPORATION    LAW    OF    DELAWARE. 

the  amount  of  dividends  declared  or  paid  during  the  same 
time ;  eacli  parlor,  palace  or  sleeping  car  company  shall  state 
the  gross  amount  of  its  receipts  for  fare  or  tolls  for  transpor- 
tation of  passengers  within  this  state  during  the  same  time ; 
each  oil  or  pipe  line  company  engaged  in  the  transportation 
of  oil  or  crude  petroleum  shall  state  the  gross  amount  of  its 
receipts  from  the  transportation  of  oil  or  petroleum  through 
its  pipes  or  in  and  by  its  tanks  or  cars  in  this  state  during  the 
same  time ;  each  fire,  marine,  live  stock,  casuality  or  accident 
insurance  company  shall  state  the  total  amount  of  premiums 
received  by  it  for  insurance  upon  the  lives  of  persons  resident 
or  property  located  within  this  state,  during  the  same  time. 

PENALTY  FOR  FALSE  STATEMENT,  OR  FOR  NEGLECT  TO 
MAKE  STATEMENT. 

Section  3.  If  any  of^cer  of  any  corporation  required  by 
this  act  to  make  a  return  to  the  secretary  of  state,  shall,  in 
such  return,  make  any  false  statement,  he  shall  be  deemed 
guilty  of  perjury;  if  any  such  corporation  shall  neglect  or  re- 
fuse to  make  such  return  within  the  time  limited  as  aforesaid 
the  secretary  of  state  shall  ascertain  and  fix  the  amount  of 
the  annual  license  fee  or  franchise  tax,  and  the  basis  upon 
which  the  same  is  determined,  in  such  manner  as  may  be 
deemed  by  him  most  practicable,  and  the  amount  so  fixed  by 
him  shall  stand  as  such  basis  of  taxation  under  this  act. 

RATE  OF  TAX. 

Section  4.  That  each  telegraph,  telephone,  cable,  and  ex- 
press corporation  shall  pay  to  the  state  treasurer  for  the  use 
of  the  state,  an  annual  license  fee  or  franchise  tax  at  the  rate 
of  one  per  centum  upon  the  gross  amount  of  its  receipts  so 
returned  or  ascertained :  that  each  corporation  organized  for 
the  distribution  of  electricity,  heat  or  power,  or  organized  for 
the  purpose  of  producing  or  distributing  steam,  heat  or 
power,  or  organized  for  the  purpose  of  the  production,  distri- 
bution or  sale  of  gas  shall  pay  to  the  state  treasurer,  for  the 


CORPORATION    LAW    OF    DELAWARE.  1 37 

use  of  the  state,  annual  license  fee  or  franchise  tax  at  the  rate 
of  two-fifths  of  one  per  centum  upon  the  gross  amount  of  its 
receipts  so  returned  or  ascertained,  and  four  per  centum  upon 
the  dividends  in  excess  of  four  per  centum  so  paid  or  declared 
by  any  such  corporation ;  that  each  oil  or  pipe  line  corpora- 
tion shall  pay  to  the  state  treasurer,  for  the  use  of  the  state, 
an  annual  license  fee  or  franchise  tax  at  the  rate  of  three-fifths 
of  one  per  centum  upon  the  gross  amount  of  its  receipts  so 
returned  or  ascertained ;  that  each  insurance  company  other 
than  life  shall  pay  to  the  state  treasurer  for  the  use  of  the 
state,  an  annual  license  fee  or  franchise  tax  at  the  rate  of 
three-fourths  of  one  per  centum  upon  the  gross  amount  of 
its  premiums  so  returned  or  ascertained ;  that  each  life  insur- 
ance company  shall  pay  to  the  state  treasurer,  for  the  use  of 
the  state,  annual  license  fee  or  franchise  tax  of  three-fourths 
of  one  per  centum  upon  the  amount  of  its  surplus  on  the 
thirty-first  day  of  December  next  preceding  as  fixed  by  sec- 
tion 5  of  this  act,  and  in  addition  thereto,  a  further  annual 
license  fee  or  franchise  tax  of  thirty-one  hundreds  of  one  per 
centum  upon  the  total  gross  insurance  premiums  collected 
by  such  companies  during  the  year  ending  the  thirty-first  of 
December  next  preceding.  The  insurance  commissioner  of 
this  state  shall  ascertain  and  report  to  the  secretary  of  state 
all  facts  necessary  to  enable  the  said  secretary  of  state  to  as- 
certain and  fix  the  amount  of  taxation  to  be  paid  by  life  in- 
surance companies  under  this  act,  and  shall  also  certify  to 
each  of  said  companies  the  amount  of  such  taxation  under 
this  act;  that  each  parlor,  palace,  or  sleeping  car  corporation 
shall  pay  to  the  state  treasurer,  for  the  use  of  the  state  an 
annual  license  fee  or  franchise  tax  at  the  rate  of  one  and  one- 
half  per  centum  upon  the  gross  amount  of  its  receipts  so  re- 
turned or  ascertained ;  if  any  oil  or  pipe  line  corporation  has 
part  of  its  transportation  line  in  this  state  and  part  thereof 
in  another  state  or  other  states,  such  corporation  shall  return 
a  statement  of  its  gross  receipts  for  transportation  of  oil  or 
petroleum  over  its  whole  line,  together  with  a  statement  of 


138  CORPORATION    LAW    OF    DELAWARE. 

the  whole  length  of  its  line,  and  the  length  of  its  line  in  this 
state;  such  corporation  shall  pay  an  annual  license  fee  or 
franchise  tax  to  the  state  treasurer,  for  the  use  of  the  state, 
at  the  aforesaid  rate  upon  such  proportion  of  its  said  gross 
receipts  as  the  length  of  its  line  in  this  state  bears  to  the  whole 
length  of  its  line ;  that  all  other  corporations  hereafter  incor- 
porated under  the  laws  of  this  state,  and  not  hereinbefore  pro- 
vided for  shall  make,  on  or  before  the  first  Tuesday  of  Jan- 
uary next,  and  annually  thereafter,  return  to  the  secretary  of 
state  of  such  information  as  may  be  required  by  him  to  carry 
out  the  provisions  of  this  act,  and  shall  pay  an  annual  license 
fee  or  franchise  tax  of  one-twentieth  of  one  per  centum  on 
all  amounts  of  capital  stock  issued  and  outstanding  up  to  and 
including  the  sum  of  three  million  dollars ;  on  all  sums  of  cap- 
ital stock  issued  and  outstanding  in  excess  of  three  million 
dollars  and  not  exceeding  five  million  dollars,  an  annual 
license  fee  or  franchise  tax  of  one-fortieth  of  one  per  centum 
and  the  further  sum  of  thirty  dollars  per  annum  per  one 
million  dollars  or  any  part  thereof,  on  all  amounts  of  capital 
stock,  issued  and  outstanding  in  excess  of  five  million  dollars ; 
provided,  that  this  act  shall  not  apply  to  railroad,  railway, 
canal  or  banking  corporations  or  to  savings  banks,  cemeteries 
or  religious  corporations,  or  to  purely  charitable  or  educa- 
tional associations  or  manufacturing  or  mining  corporations, 
at  least  fifty  per  centum  of  whose  capital  stock  issued  and 
outstanding  is  invested  in  mining  or  manufacturing  carried 
on  within  this  state;  if  any  manufacturing  or  mining  com- 
pany, carrying  on  business  in  this  state,  shall  have  less  than 
fifty  per  centum  of  its  capital  stock  issued  and  outstanding, 
invested  in  business  carried  on  within  this  state  such  com- 
pany shall  pay  the  annual  license  fee  or  franchise  tax  herein 
provided  for  companies  not  carrying  on  business  in  this  state, 
but  shall  be  entitled  in  the  computation  of  such  tax,  to  a  de- 
duction from  the  amount  of  its  capital  stock  issued  and  out- 
standmg  of  the  assessed  value  of  its  real  and  personal  estate 
so  used  in  manufacturing  or  mining. 


CORPORATION    LAW    OF    DELAWARE.  1 39 

CERTIFICATE  OF  SECRETARY  OF  STATE  TO  TREASURER. 

Section  5.  That  the  secretary  of  state  shall  certify  and  re- 
port to  the  state  treasurer,  on  or  before  the  first  Tuesday  of 
February  in  each  year,  a  statement  of  the  basis  of  the  annual 
license  fee  or  franchise  tax  as  returned  by  each  corporation 
or  company  to  or  [to]  be  ascertained  by  the  said  secretary  of 
state,  and  the  amount  of  tax  due  thereon  respectively,  at  the 
rate  fixed  by  this  act ;  such  tax  shall  thereafter  become  due 
and  payable  and  it  shall  be  the  duty  of  the  state  treasurer  to 
receive  the  same ;  if  the  tax  of  any  corporation  or  company 
remains  unpaid  on  the  first  day  of  March  after  the  same  be- 
comes due  the  same  shall  thenceforth  bear  interest  at  the  rate 
of  one  per  centum  for  each  month  until  paid ;  the  secretary  of 
state  shall  have  power  to  require  of  any  corporation  or  com- 
pany subject  to  tax  under  this  act  such  information  or  reports 
touching  the  affairs  of  such  corporation  or  company  as  may 
be  necessary  to  carry  out  the  provisions  of  this  act ;  and  may 
require  the  production  of  the  books  of  any  such  corporation 
or  company,  and  may  swear  or  affirm  and  examine  witnesses 
in  relation  thereto. 

TAX  TO  BE  A  DEBT. 

Section  6.  That  such  tax  when  determined  shall  be  a  debt 
due  from  such  corporation  or  company  to  the  state,  for  which 
an  action  at  law  may  be  maintained  after  the  same  shall  have 
been  in  arrears  for  the  period  of  one  month,  such  tax  shall 
also  be  a  preferred  debt  in  case  of  insolvency. 

REMEDIES  FOR  COLLECTION  OF  TAX. 

Section  7.  That  in  addition  to  other  remedies  for  the  col- 
lection of  such  tax  it  shall  be  lawful  for  the  attorney-general, 
either  of  his  own  motion  or  upon  request  of  the  state  treas- 
urer, whenever  any  tax  due  under  this  act  from  any  corpora- 
tion or  company  shall  have  remained  in  arrears  for  a  period 
of  three  months  after  the  same  shall  have  become  payable, 
to  apply  to  the  court  of  chancery,  by  petition  in  the  name  of 


140  CORPORATION    LAW    OF    DELAWARE. 

the  State,  on  five  days'  notice  to  such  corporation  or  com- 
pany, which  notice  may  be  served  in  such  manner  as  the 
chancellor  may  direct  for  an  injunction  to  restrain  such  cor- 
poration or  company  from  the  exercise  of  any  franchise,  or 
the  transaction  of  any  business  within  this  state  until  the  pay- 
ment of  such  tax  and  interest  due  thereon  and  the  cost  of  such 
application  shall  be  fixed  by  the  chancellor;  the  said  court 
is  hereby  authorized  to  grant  such  injunction,  if  a  proper  case 
appears  and  upon  the  granting  and  service  of  such  injunction, 
it  shall  not  be  lawful  for  any  such  corporation  or  company 
thereafter  to  exercise  any  franchise  or  transact  any  business 
in  this  state  until  such  injunction  shall  be  dissolved. 

FOREIGN  FIRE   INSURANCE   COMPANIES   EXEMPT. 

Section  8.  That  this  act  shall  not  apply  to  or  in  any  man- 
ner affect  the  tax  upon  the  premiums  obtained  in  this  state 
by  foreign  fire  insurance  companies  and  their  agents,  which 
tax  shall  be  in  lieu  of  the  tax  herein  provided  and  shall  be 
collected  and  distributed  as  is  specially  provided  by  law  in 
relation  thereto. 

RETALIATORY  TAXATION. 

Section  9.  When,  by  the  laws  of  any  other  state  or  nation, 
any  other  or  greater  taxes,  fines,  penalties,  licenses,  fees  or 
other  obligations  or  requirements  are  imposed  upon  corpora- 
tions of  this  state,  doing  business  in  such  other  state  or  nation, 
or  upon  their  agents  therein,  than  the  laws  of  this  state 
impose  upon  their  corporations  or  agents  doing  business  in 
this  state,  so  long  as  such  laws  continue  in  force  in  such  for- 
eign state  or  nation,  the  same  taxes,  fines,  penalties,  licenses, 
fees,  obligations  and  requirements,  of  whatever  kind  shall  be 
imposed  upon  all  corporations  of  such  other  state  or  nation 
doing  business  within  this  state  and  upon  their  agents  here ; 
provided,  that  nothing  herein  shall  be  held  to  repeal  any  duty, 
condition  or  requirement  now  imposed  by  law  upon  such  cor- 
porations of  other  states  or  nations  transacting  business  in 
the  state. 


CORPORATION    LAW    OF    DELAWARE.  I4I 

CHARTER   VOID   BY   FAILURE   TO   PAY   TAXES. 

Section  io.  If  any  corporation  hereafter  created  shall  for 
two  consecutive  years  neglect  or  refuse  to  pay  the  state  any 
tax  which  has  been  or  shall  be  assessed  against  it,  or  which  it 
is  required  to  pay,  under  any  law  of  this  state  and  made  pay- 
able into  the  state  treasury,  the  charter  of  such  corporation 
shall  be  void,  and  all  powers  conferred  by  law  upon  such  cor- 
porations are  hereby  declared  inoperative  and  void,  unless 
the  governor  shall,  for  good  cause  shown  to  him,  give  further 
time  for  the  payment  of  such  taxes,  in  which  case  a  certificate 
thereof  shall  be  filed  by  the  governor  in  the  office  of  the  state 
treasurer,  stating  the  reasons  therefor. 

REPORT  OF  STATE  TREASURER.      GOVERNOR'S  PROCLAMA- 
TION VOIDING  CHARTER. 

Section  ii.  On  or  before  the  first  Tuesday  of  January  in 
each  year  the  state  treasurer  shall  report  to  the  governor  a 
list  of  all  the  corporations  or  companies  which  for  two  years 
next  preceding  such  report  have  failed,  neglected  or  refused 
to  pay  the  taxes  assessed  against  them  or  due  by  them,  under 
the  law  of  this  state,  and  the  governor  shall  forthwith  issue 
his  proclamation,  declaring  under  this  act  of  the  legislature 
that  the  charters  of  these  corporations  are  repealed. 

PROCLAMATION  TO  BE  FILED  AND  PUBLISHED. 

Section  12.  The  proclamation  of  the  governor  shall  be 
filed  in  the  office  of  the  secretary  of  state,  and  published  in 
such  newspapers  and  for  such  length  of  time  as  the  governor 
shall  designate. 

PENALTY  FOR  ACTING  UNDER  VOID  CHARTER. 

Section  13.  Any  person  or  persons  who  shall  exercise 
or  attempt  to  exercise  any  powers  under  the  charter  of  any 
such  corporation  after  the  issuing  of  such  proclamation  shall 
be  deemed  guilty  of  a  misdemeanor,  and  shall  be  punished 
by  imprisonment  not  exceeding  one  year,  or  a  fine  not  eX' 


142  CORPORATION    LAW    OF    DELAWARE. 

ceeding  one  thousand  dollars,  or  both,  in  the  discretion  of 
the  court. 

OTHER  REMEDIES  FOR  COLLECTION  OF  TAXES. 

Section  14.  After  any  corporation  of  this  state  hereafter 
incorporated  has  failed  and  neglected  for  the  space  of  two 
consecutive  years  to  pay  the  taxes  imposed  on  it  by  law,  and 
the  state  treasurer  of  this  state  shall  have  reported  such  cor- 
poration to  the  governor  of  this  state,  as  provided  in  this  act. 
then  it  shall  be  lawful  for  the  attorney-general  of  this  state 
to  proceed  against  said  corporation  in  the  court  of  chancery 
of  this  state  for  the  appointment  of  a  receiver,  or  otherwise, 
and  the  said  court  in  such  proceeding  shall  ascertain  the 
amount  of  the  taxes  remaining  due  and  unpaid  by  such  cor- 
poration to  the  state  of  Delaware,  and  shall  enter  a  final  de- 
cree for  the  amount  so  ascertained,  and  thereupon  a  fieri 
facias  or  other  process  shall  issue  for  the  collection  of  the 
same  as  other  debts  are  collected,  and  if  no  property  which 
may  be  seized  and  sold  on  fieri  facias  shall  be  found  within 
the  said  state  of  Delaware,  sufficient  to  pay  such  decree,  the 
said  court  shall  further  order  and  decree  that  the  said  cor- 
poration, within  ten  days  from  and  after  the  service  of  notice 
of  such  decree  upon  any  of^cer  of  said  corporation  upon 
whom  service  of  process  may  be  lawfully  made,  or  such  notice 
as  the  court  shall  direct,  shall  assign  and  transfer  to  the  trus- 
tees or  receiver  appointed  by  the  court,  any  chose  in  action, 
or  any  patent  or  patents,  or  any  assignment  of,  or  license 
under  any  patented  invention  or  inventions  owned  by.  leased 
or  licensed  to  or  controlled  in  whole  or  in  part  by  said  cor- 
poration, to  be  sold  by  said  receiver  or  trustee  for  the  satis- 
faction of  such  decree,  and  no  injunction  theretofore  issued 
nor  any  forfeiture  of  the  charter  of  any  such  corporation  shall 
be  held  to  exempt  such  corporation  from  compliance  with 
such  order  of  the  court ;  and  if  the  said  corporation  shall 
neglect  or  refuse  within  ten  days  from  and  after  the  service 
of  such  notice  of  such  decree  to  a?sis:n  and  transfer  the  same 


CORPORATION    LAW    OF    DELAWARE.  I43 

to  such  receiver  or  trustee  for  sale  as  aforesaid,  it  shall  be  the 
duty  of  said  court  to  appoint  a  trustee  to  make  the  assign- 
ment of  the  same,  in  the  name  and  on  behalf  of  such  corpo- 
ration, to  the  receiver  or  trustee  appointed  to  make  such  sale, 
and  the  said  receiver  or  trustee  shall  thereupon,  after  such 
notice  and  in  such  manner  as  required  for  the  sale  under  fieri 
facias  of  personal  property,  sell  the  same  to  the  highest  bid- 
der, and  the  said  receiver  or  trustee,  upon  the  payment  of  the 
purchase  money,  shall  execute  and  deliver  to  such  purchaser 
an  assignment  and  transfer  of  all  the  patents  and  interests  of 
the  corporation  so  sold,  which  assignment  or  transfer  shall 
vest  in  the  purchaser  a  valid  title  to  all  the  right,  title  and  in- 
terest whatsoever  of  the  said  corporation  therein,  and  the 
proceeds  of  such  sale  shall  be  applied  to  the  payment  of  such 
unpaid  taxes,  together  with  the  costs  of  said  proceedings. 

PROCLAMATION    OF   GOVERNOR   CORRECTING   MISTAKE. 

Section  15.  Whenever  it  is  established  to  the  satisfaction 
of  the  governor  that  any  corporation  named  in  said  procla- 
mation has  not  neglected  or  refused  to  pay  said  tax  within 
two  consecutive  years,  or  has  been  inadvertently  reported  to 
the  governor  by  the  state  treasurer  as  refusing  or  neglecting 
to  pay  the  same  as  aforesaid,  that  the  governor  be  and  he  is 
hereby  authorized  to  correct  such  mistake,  and  to  make  the 
same  known  by  filing  his  proclamation  to  that  effect  in  the 
office  of  the  secretary  of  state. 

RESTORATION  OF  CHARTER. 

Section  16.  If  the  charter  of  any  corporation  hereafter 
created  shall  become  inoperative  or  void  by  proclamation  of 
the  governor,  or  by  operation  of  law,  for  non-payment  of 
taxes  the  governor,  by  and  with  the  advice  of  the  attorney- 
general,  may,  at  any  time  within  two  years  thereafter,  or 
after  the  default  in  the  payment  of  such  taxes,  upon  payment 
by  said  corporation  to  the  secretary  of  state  of  such  sum  in 
lieu  of  taxes  and  penalties  as  to  them  may  seem  reasonable, 


144  CORPORATION    LAW    OF    DELAWARE. 

but  in  no  case  to  be  less  than  the  fees  required  as  upon  the  fil- 
ing of  the  original  certificate  of  incorporation,  permit  such 
corporation  to  be  reinstated  and  entitled  to  all  its  franchises 
and  privileges,  and  upon  such  payment  as  aforesaid  the  secre- 
tary of  state  shall  issue  his  certificate  entitling  such  corpora- 
tion to  continue  in  said  business  and  its  said  franchises. 

Nothing  in  this  section  contained  shall  relieve  said  corpo- 
ration from  penalty  of  forfeiture  of  franchises  in  case  of  failure 
to  pay  future  taxes  imposed  as  in  this  act  provided. 

REVIEW  OF  ASSESSMENT. 

Section  17.  The  officers  of  any  corporation  who  shall  con- 
sider the  tax  levied  under  the  provisions  of  this  act  excessive 
or  otherwise  unjust,  may  make  application  to  the  governor 
for  a  review  of  the  assessment  and  a  readjustment  of  the  tax ; 
provided,  there  be  filed  with  the  governor  within  three 
months  from  the  date  of  assessment  a  petition  of  appeal,  duly 
verified  according  to  law,  stating  specifically  the  grounds 
upon  which  the  appeal  is  taken  and  the  reasons  why  the  tax 
is  considered  excessive  or  unjust;  the  governor  shall  there- 
upon proceed  to  investigate  the  contentions  raised  by  the 
said  petition  of  appeal ;  and  for  the  purpose  of  such  hearing, 
the  ofBcers  of  said  corporation  may  be  summoned  to  appear 
before  the  governor,  either  in  person  or  by  attorney,  and 
questioned  as  to  the  statements  set  forth  in  the  said  petition 
of  appeal ;  if,  in  the  opinion  of  the  governor  it  shall  appear 
that  the  tax  so  levied  as  aforesaid  is  excessive  or  unjust,  he 
shall  thereupon  require  the  olificers  of  the  corporation  to  file 
with  him  a  corrected  return,  and  upon  said  corrected  return 
the  assessment  shall  be  adjusted  and  the  tax  reduced  or 
amended  as  in  the  opinion  of  the  governor  shall  seem  proper. 

If  the  petition  of  appeal  shall  not  be  filed  within  three 
months  from  the  date  of  the  assessment,  as  aforesaid,  the 
right  to  appeal  to  the  governor  shall  be  considered  and 
treated  as  having  been  waived  and  the  amount  of  tax  levied 
shall  be  payable  and  collectible  at  once. 


CORPORATION    LAW    OF    DELAWARE.  145 

COMPENSATION  OF  SECRETARY  OF  STATE. 

Section  i8.  That  the  secretary  of  state  shall  receive  for 
the  services  required  of  him  under  the  provisions  of  this  act 
the  sum  of  five  hundred  dollars,  to  be  paid  to  him  annually  in 
addition  to  the  salary  and  fees  now  provided  by  law. 

PRE-EXISTING   CORPORATIONS   EXEMPT   FROM   TAX. 

Section  19.  That  the  provisions  of  this  act  shall  not  apply 
to  corporations  heretofore  incorporated  and  the  property  of 
such  corporations  is  hereby  made  exempt  from  taxation 
under  the  provisions  of  this  act,  such  exemption,  in  the  opin- 
ion of  the  general  assembly,  being  best  to  promote  the  public 
welfare. 

FRANCHISE  TAX. 

The  franchise  tax  on  corporations  as  laid  by  the  legislature 
of  the  state  of  Delaware  follows  very  closely  the  franchise  tax 
of  the  state  of  New  Jersey. 

Article  viii,  section  i,  of  the  state  constitution,  reads:  "All 
taxes  shall  be  uniform  upon  the  same  class  of  subjects  within 
the  territorial  limits  of  the  authority  levying  the  tax,  and  shall 
be  levied  and  collected  under  general  laws,  but  the  general 
assembly  may  by  general  laws  exempt  from  taxation  such 
property  as  in  the  opinion  of  the  general  assembly  will  best 
promote  the  public  welfare." 

This  constitutional  provision  insures  the  uniformity  of 
taxes  upon  each  class  of  corporations,  and  prevents  the  legis- 
lature from  passing  a  law  laying  special  taxes  upon  any  cor- 
poration to  its  detriment,  or  in  favor  of  any  other  corporation 
in  the  same  class. 

The  tax  is  computed  upon  the  basis  of  the  capital  stock  issued  and  out- 
standing, and  it  is  held  that  stock  is  issued  when  the  company  has  re- 
ceived and  accepted  subscriptions  for  the  same,  whether  paid  for  or  not: 
American  Pig  Iron,  etc.,  Co.  v.  Assessors,  56  N.  J.  Law,  389. 

As  long  as  the  corporation  continues  it  is  liable  for  this  franchise  tax. 
It  continues  after  a  receiver  is  appointed  and  until  the  dissolution  of  the 
company:    Kirkpatrick  v.  Assessors,  57  N.  J.  Law,  53. 

The  fact  that  the  company  has  ceased  to  do  business  and  to  use  its 
franchise,  even  though  compelled  so  to  do  by  the  decree  of  the  court  en- 
joining the  company  from  using  certain  patents  which  form  the  basis  of 
the  company's  business,  does  not  relieve  it  from  the  duty  to  pay  the 
10 


146  CORPORATION    LAW    OF    DELAWARE. 

franchise  tax.  If  it  wishes  to  withdraw  from  active  business,  it  must,  to 
escape  taxation,  take  proceedings  to  dissolve  in  the  manner  prescribed  by 
law.  In  case  of  failure  to  pay  such  tax  the  act  provides  that  proceedings 
may  be  instituted  by  the  attorney-general  to  enjoin  the  company  from 
exercising  its  franchises  until  such  tax  is  paid:  Edison  Phonograph  Co. 
V.  Assessors,  55  N.  J.  Law,  55;  Electro-Pneumatic  Transit  Co.'s  Case, 
51  N.  J.  Eq.  71- 

When  a  "proper  case"  is  presented,  the  Court  of  Chancery  has  no  dis- 
cretion but  must  issue  the  injunction:  Electro-Pneumatic  Transit  Co.'s 
Case,  51  N.  J.  Eq.  71. 

When  the  increase  in  capital  stock  distributed  among  the  stockholders 
according  to  their  respective  holdings  of  stock  represents  net  earnings; 
or  when  a  corporation  increases  its  capital  and  plant  and  the  basis  of  its 
payment  of  dividends  without  any  direct  or  stock  dividend,  it  is  neverthe- 
less subject  to  be  taxed  on  the  increase  as  upon  the  dividend:  Common- 
wealth V  Cleveland,  Painesville  &  Ashtabula  R.  R.  Co.,  29  Pa.  St.  Rep. 
370;  Lehigh  Crane  Iron  Co.  v.  Commonwealth,  55  lb.  448. 

To  exempt  a  manufacturing  corporation  from  tax  it  would 
seem : 

(i)  That  it  has  actually  located  its  factory  within  the  state 
of  Delaware  and  is  engaged  in  the  business  of  manufacturing 
under  its  charter  therein. 

(2)  That  at  least  fifty  per  cent,  of  its  capital  stock  is  in- 
vested in  such  manufacturing  business  carried  on  within  the 
state. 

(3)  If  capital  stock  has  been  issued  for  patents  or  patent 
rights,  that  such  patents  or  patent  rights  are  necessary  for 
the  manufacture  in  Delaware. 

Edison  Phonograpli  Co.  z\  Assessors,  54  N.  J.  Law.  430;  Edison  U.  P. 
Co.  V.  Assessors,  57  N.  J.  Law.  520:  Norton  Construction  Co.  v.  As- 
sessors, 53  N.  J.  Law,  564. 

The  term  "capital  stock."  as  used  in  this  act.  refers  to  the  capital  stock 
authorized  by  the  charter  of  a  corporation  and  subscribed  or  raised  by 
its  stockholders,  on  which  it  pays  dividends,  and  which  it  is  obliged  to 
maintain  intact,  not  the  surplus  or  undivided  profits,  however  invested, 
which  it  can  at  any  time  turn  into  money  and  divide  among  its  stock- 
holders:   People  ex  rel.  Singer  Mfg.  Co.  v.  Wemple.  78  Hun,  63. 

The  tax  is  levied  on  the  amount  of  stock  issued  and  outstanding  as  a 
fixed  factor,  without  regard  to  the  purpose  for  which  it  was  issued,  or 
whether  issued  for  value  or  not:  Am.  Pig  Iron  Co.  v.  Assessors.  27  Vr. 
389.    All  stock  subscribed  for  is  considered  issued:    lb. 

What  is  manufacturing  within  the  meaning  of  the  act? — As  pointed  out 
above,  it  is  what  the  company  actually  does,  and  not  what  it  is  authorized 
by  its  charter  to  do,  that  determines  whether  a  company  is  engaged  in 


I 


CORPORATION    LAW    OF    DELAWARE.  147 

manufacturing  carried  on  in  this  state.  In  construing  the  statute  the 
court  will  give  the  word  "manufacturing"  its  popular  sense.  Therefore, 
it  was  held  that  printing  and  publishing  a  newspaper  is  not  manufactur- 
ing, but  that  where  a  company  is  incorporated  "to  conduct  and  prosecute 
the  business  of  book  printing  and  job  printing,  engraving,  electrotyping 
and  lithographing,"  and  its  capital  is  invested  in  the  prosecution  of  that 
business,  and  it  manufactures  on  orders  only,  it  is  a  manufacturing  com- 
pany within  the  meaning  of  the  statute:  Evening  Journal  Association  v. 
State  Board  of  Assessors,  47  N.  J.  Law,  36;  Printing  Co.  v.  Assessors, 
51  N.  J.  Law,  75. 

The  collection,  storage,  preparation  for  market  and  transportation  of 
ice  is  not  a  manufacture,  but  the  production  of  ice  by  artificial  means  is: 
People  V.  Knickerbocker  Ice  Co.,  99  N.  Y.  181.  The  mere  appropriation 
of  an  article  which  is  furnished  by  nature  is  not  a  manufacture.  Thus, 
the  liberation  of  natural  gas  or  oil  from  the  earth,  and  its  transportation  to 
consumer,  is  not  a  manufacture:  Commonwealth  v.  Northern  Elec.  Lt. 
&  Power  Co.  145  Pa.  St.  Rep.  117.  A  company  engaged  in  finishing  and 
shaping  material  so  as  to  make  bridges  and  selling  and  erecting  the  same, 
held  to  be  manufacturing:  Commonwealth  2'.  Keystone  Bridge  Co.,  156 
Pa.  St.  500. 

In  a  case  relative  to  the  payment  of  excise  duties  in  Great  Britain  it 
was  held  that  a  printer  of  calicoes  was  not  a  manufacturer:  The  King  v. 
Tregoning.  2  Younge  &  Jervis,  132. 

The  United  States  circuit  court  has  held  that  cutting  grass  and  con- 
verting it  into  hay,  pressing  it  in  bales  and  transporting  it  to  market  did 
not  result  in  the  production  of  a  manufactured  article:  Frazee  v.  Moffit, 
20  Blatchford  Cir.  Ct.  Rep.  267. 

The  printing,  publishing  and  selling  of  books,  and  job  printing,  con- 
stitute a  manufacturing  business:  People  ex  rel.  Frederick  A.  Stokes  Co. 
v.  Roberts,  90  Hun,  533:  Press  Printing  Co.  v.  State  Bd.  of  Assessors, 
51  N.  J.  Law  Repts.  75:  Evening  Journal  Assn.  v.  State  Bd.  of  Assessors, 
47  N.  J.  L.  Repts.  36. 

The  courts  have  decided  that  the  exemption  in  favor  of  manufacturing 
corporations  applies  only  to  such  corporations  as  create  some  new  and 
artificial  product  within  the  state:  People  ex  rel.  Brush  El.  Mfg.  Co.  r. 
Wemple,  129  N.  Y.  543;  People  ex  rel.  Edison  El.  111.  Co.  v.  Wemple,  129 
N.  Y.  664;  People  v.  Horn  Silver  Mining  Co.,  105  N.  Y.  76;  People  z: 
Knickerbocker  Ice  Co..  99  N.  Y.  181;  People  r.  N.  Y.  F.  Dock  Co.,  92 
N.  Y.  487. 

The  process  of  manufacture  is  supposed  to  produce  some  new  article 
by  the  application  of  skill  and  labor  to  the  raw  material:  People  v. 
Roberts,  145  N.  Y.  375. 

A  domestic  corporation  engaged  in  slaughtering  cattle,  preparing  the 
same  and  the  various  products  thereof  for  market,  a  portion  of  which 
business  is  carried  on  in  this  state  and  a  portion  elsewhere,  is  not  wholly 
engaged  in  manufacturing  in  New  York  state:  People  ex  rel.  Schvvarzs- 
child  &  Sulzberger  Co.  v.  Roberts,  11  App.  Div.  449. 


148  CORPORATION    LAW    OF    DELAWARE. 

The  business  of  refining  crude  petroleum  is  manufacturing:  Comtnon- 
wealth  V.  Atlantic  Ref.  Co.  2  Pa.  Co.  Ct.  Rep.  62. 

Dyeing  and  finishing  cotton  goods  is  manufacturing:  Commonwealth 
V.  Quaker  City  Dye  Works,  5  Pa.  Co.  Ct.  Rep.  94. 

Printing  and  publishing  a  newspaper  is  not  manufacturing:  Press 
Printing  Co.  v.  State  Bd.  of  Assessors,  51  N.  J.  Law  Repts.  75;  Evening 
Journal  Assn..  47  lb.  36. 

A  cooper  who  makes  barrels,  hogsheads  and  similar  articles  of  woods, 
such  as  coopers  usually  make,  is  a  manufacturer:  New  Orleans  v. 
Le  Blanc,  34  La.  Ann.  596. 

A  foreign  corporation  claiming  exemption  as  a  manufacturing  corpora- 
tion must  show  that  some  substantial  portion  of  its  manufacturing  is  car- 
ried on  in  this  state:  People  ex  rel.  Roebling's  Sons  Co.  v.  Wemple.  63 
Hun,  452;  af¥'d  138  N.  Y.  582. 

A  corporation  engaged  in  the  sale  of  spices,  baking  powder,  cofiee  and 
tea,  purchased  these  articles  in  bulk.  The  spices  and  baking  powder  were 
merely  put  up  in  packages  and  sold.  Various  kinds  of  tea  were  mixed  and 
sold  as  "combination  tea."  The  coflfee  was  roasted  and  ground.  Held, 
that  this  was  not  manufacture,  and  the  corporation  was  not  exempt  from 
taxation  as  a  manufacturing  corporation:  People  ex  rel.  Union  Pacific 
Tea  Co.  v.  Roberts,  145  N.  Y.  375. 

A  manufacturing  corporation  employed  in  other  business  is  liable  to 
taxation  upon  so  much  of  its  capital  stock  only  as  is  not  employed  in 
strictly  manufacturing  operations:  Commonwealth  v.  Lackawanna  Iron 
&  Coal  Co..  129  Pa.  St.  Rep.  346. 

Where  a  certificate  of  incorporation  definitely  states  the  location  of  the 
principal  office  of  the  company  and  adds  a  clause,  "or  at  such  other  place 
as  the  stockholders  of  the  company  might  determine,"  the  additional 
clause  has  no  force,  touching  the  residence  of  the  corporation  for  the 
purposes  of  taxation,  and  must  be  treated  as  surplusage:  People  ex  rel. 
Edison  Electric  Light  Co.  z'.  Barker,  91  Hun.  594. 

The  residence  of  a  corporation  for  the  purposes  of  taxation  cannot  be 
inferred  from  the  mere  place  of  filing  its  certificate  of  incorporation. 
When  the  law  under  which  it  was  formed  does  not  fix  its  residence  or  re- 
quire the  location  of  its  principal  office  to  be  stated  in  the  certificate,  its 
residence  is  deemed  to  be  where  its  principal  place  of  business  is  actually 
situated:  Austen  v.  Hudson  River  Telephone  Co.  73  Hun,  96:  Austen  v. 
Westchester  Telephone  Co.  8  Misc.  R.  11;  Oswego  Starch  Factory  z: 
Dolloway,  21  N.  Y.  454;  Conroe  z\  Natl.  Protection  Ins.  Co.  10  How.  Pr. 
403;  Hubbard  v.  Same.  11  lb.  149. 

When  a  law  under  which  a  corporation  is  organized  requires  the  certi- 
ficate of  incorporation  to  state  the  location  of  the  principal  office,  and 
such  location  is  stated  in  the  certificate,  the  statement  is  conclusive  evi- 
dence of  the  residence  of  the  corporation  for  the  purposes  of  taxation: 
Austen  v.  Hudson  Riv.  Telephone  Co.  73  Hun,  96;  Western  Transporta- 
tion Co.  r.  Scheu,  19  N.  Y.  408;  Oswego  Starch  Factory  7'.  Dolloway.  21 
lb.  449;  Chesebrough  Mfg.  Co.  v.  Coleman.  44  Hun.  545;  Union  Steam- 
boat Co.  V.  Buffalo,  82  N.  Y.  351. 


CORPORATION    LAW    OF    DELAWARE.  149 

FORFEITURE   FOR  NON-PAYMENT    OF   TAXES. 

It  may  well  be  questioned  under  section  i,  article  ix,  of  the 
constitution,  whether  the  non-payment  of  state  taxes  within 
two  consecutive  years  is  such  an  ''abuse,  misuse  or  non-user 
of  the  corporate  powers,  privileges  or  franchises"  as  to  fur- 
nish a  ground  for  the  revocation  or  forfeiture  of  a  corporate 
charter. 

But  aside  from  such  question  the  constitutional  provision 
is  plain  that  "any  proceeding  for  such  revocation  or  forfeiture 
shall  be  taken  by  the  attorney-general  as  may  be  provided 
by  law." 

This  evidently  contemplates  a  forfeiture  or  revocation  only 
by  a  proper  proceeding  before  a  judicial  tribunal ;  the  for- 
feiture should  be  determined  as  other  facts  are  judicially  de- 
termined in  the  regular  and  legal  method  by  a  competent 
court  after  granting  a  hearing  to  both  parties,  and  such  for- 
feiture proceeding  shall  be  taken  only  by  tlw  attorney-gen-eral. 

Section  1 1  of  this  act,  providing  for  a  forfeiture  of  corpo- 
rate charters  for  the  non-payment  of  taxes  by  the  governor  of 
the  state,  by  a  summary  proceeding,  is  clearly  in  contraven- 
tion of  the  state  constitution  :  article  ix.  section  i. 


150  CORPORATION    LAW    OF    DELAWARE. 

FOREIGN  CORPORATIONS  DOING  BUSINESS  IN  THIS  STATE. 

All  foreign  corporations  (except  fire  insurance  companies) 
before  doing  business  in  this  state  by  branch  offices,  agents 
or  representatives,  are  required  to  file  in  the  office  of  the  sec- 
retary of  state,  certified  copies  of  their  charters,  and  the  names 
of  their  authorized  agents  in  this  state,  together  with  a  sworn 
statement  of  their  assets  and  liabilities,  and  must  pay  the 
secretary  of  state  for  the  use  of  the  state  fifty  dollars ;  viola- 
tions being  punished  by  a  fine  not  exceeding  one  thousand 
dollars:    19  Del.  Laws,  Ch.  703. 

A  later  statute  provides  that  in  addition  to  the  preceding 
requirements  foreign  corporations  must  file  certificates  in  the 
offices  of  the  prothonotaries  of  the  superior  court  in  each  of 
the  counties  of  this  state,  designating  the  name  and  residence 
of  some  person  or  agent  within  the  state  upon  whom  service 
of  process  may  be  made:   20  Del.  Laws,  Ch.  513. 


FORMS  AND  PRECEDENTS. 

BEFORE  ORGANIZATION. 
Form  1. 

SUBSCRIPTION  AGREEMENT  BEFORE  ORGANIZATION. 

Whereas,  The  organization  is  contemplated  of  a  corporation  under  an 
act  of  the  legislature  of  the  state  of  Delaware,  entitled  "An  act  providing 
a  general  corporation  law,"  to  be  known  as  the  (insert  name  of  company), 
or  by  such  other  name  as  may  be  selected,  with  a  capital  stock  of  not  less 
than  $  (state  amount  of  capital  authorized)  for  the  purpose  of  (state 

in  detail  the  business  proposed  to  be  carried  on  by  the  company),  and  it 
is  desired  by  the  undersigned  to  become  a  shareholder  in  the  said  cor- 
poration: 

Now,  therefore  (insert  name  of  subscriber),  the  undersigned,  does 
hereby  promise  and  agree  to,  and  with  (insert  name  of  promoter  or  per- 
son organizing  the  corporation)  of  ,  in  consideration  of  the 
promises  of  the  said  (subscriber)  hereinafter  stated,  that  he  will  pay  to  the 
said  (promoter)  or  to  any  person  or  corporation  to  whom  he  may  assign 
this  agreement,  on  demand,  the  sum  of  dollars,  being  the 
subscription  price  of  shares  of  the  capital  stock  of  the  said 
corporation,  or  such  part  thereof  as  may  be  called  for.  The  stock  thus 
paid  for  to  be  delivered  at  the  earliest  possible  moment  after  the  organi- 
zation of  the  company,  and  meanwhile  proper  receipts  or  scrip  to  be  issued 
to  the  undersigned. 

This  agreement  is  conditioned  upon  the  procuring  by  the  said  (pro- 
moter) of  other  bona  fide  subscriptions,  aggregating  in  all  not  less  than 
$  ,  to  the  capital  stock  of  the  said  corporation. 

The  said  (promoter)  on  his  part,  in  consideration  of  the  foregoing, 
promises  to  use  his  best  endeavors  to  obtain  such  amount  of  subscriptions, 
and  his  best  efiforts  to  perfect  the  organization  of  the  said  corporation. 

Witness  our  hands  and  seals,  this  day  of  ,  i        . 


Form  2. 

FORM  FOR  CHARTER. 

Certificate  of  incorporation  of  the  company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington.  Del. 

1.  The  name  of  the  corporation  is  the 

2.  The   location   of   its  principal    office   is   Wilmington,    Delaware,   and 
said  office  is  to  be  registered  with  the  Trust  Company. 


152  FORMS    AND    PRECEDENTS. 

3.  The  object?  and  purposes  for  which,  and  for  any  of  which,  the  cor- 
poration is  formed,  are: 

In  furtherance  of,  and  not  in  limitation  of,  the  general  powers  conferred 
by  the  laws  of  the  state  of  Delaware,  it  is  hereby  expressly  provided  that 
the  company  shall  have  also  the  following  powers. 

To  do  any  or  all  of  the  things  herein  set  forth,  to  the  same  extent  as 
natural  persons  might  or  could  do,  and  in  any  part  of  the  world. 

To  manufacture,  purchase  or  otherwise  acquire,  to  hold,  own,  mortgage, 
pledge,  sell,  assign  and  transfer,  or  otherwise  dispose  of,  to  invest,  trade, 
deal  in  and  deal  with  goods,  wares  and  merchandise  and  property  of  every 
class  and  description. 

To  acquire  the  good  will,  rights  and  property,  and  to  undertake  the 
whole  or  any  part  of  the  assets  and  liabilities,  of  any  person,  firm,  asso- 
ciation or  corporation,  and  to  pay  for  the  same  in  cash,  stock  of  this  com- 
pany, bonds  or  otherwise. 

To  apply  for,  purchase,  or  otherwise  acquire,  and  to  hold,  own.  use, 
operate,  and  to  sell,  assign,  or  to  otherwise  dispose  of,  to  grant  licenses 
in  respect  of  or  otherwise  turn  to  account  any  and  all  inventions,  improve- 
ments and  processes  used  in  connection  with,  or  secured  under,  letters- 
patent  of  the  United  States  or  elsewhere,  or  otherwise,  and  with  a  view 
to  the  working  and  development  of  the  same  to  carry  on  any  business, 
whether  manufacturing  or  otherwise,  which  the  corporation  may  think 
calculated  directly  or  indirectly  to  effectuate  these  objects. 

To  enter  into,  make,  perform  and  carry  out  contracts  of  every  kind 
with  any  person,  firm,  association  or  corporation,  and  without  limit  as 
to  amount,  to  draw,  make,  accept,  endorse,  discount,  execute  and  issue 
promissory  notes,  bills  of  exchange,  warrants,  bonds,  debentures  and  other 
negotiable  or  transferable  instruments. 

To  have  one  or  more  ofifices,  to  carry  on  all  or  any  of  its  operations 
and  business,  and  without  restriction  to  the  same  extent  as  natural  persons 
might  or  could  do,  to  purchase  or  otherwise  acquire,  to  hold,  own,  to 
mortgage,  sell,  convey  or  otherwise  dispose  of.  real  and  personal  property 
of  every  class  and  description,  in  any  state,  district,  territory  or  colony 
of  the  United  States,  and  in  any  foreign  country  or  place. 

In  general  to  carry  on  any  other  business  in  connection  therewith, 
whether  manufacturing  or  otherwise,  and  with  all  the  powers  conferred  by 
the  laws  of  Delaware  upon  corporations  under  the  act  hereinafter  re- 
ferred to. 

The  duration  of  the  corporation  shall  be  unlimited. 

4.  The  total  authorized  capital  stock  of  this  corporation  is 

dollars  ($  )  divided  into  (  )  shares  of 

dollars  ($  )  each. 

5.  The  names  and  residences  of  the  incorporators  and  the  number  of 
shares  subscribed  for  by  each,  the  aggregate  of  which  ($  )  is 
the  amount  of  capital  with  which  the  company  will  commence  business, 
are  as  follows: 

Name.  Residence.  Number  of  Shares. 


FORMS    AND    PRECEDENTS.  153 

6.  This  corporation  is  to  have  perpetual  existence. 

The  affairs  of  this  corporation  are  to  be  conducted  by  its  directors,  who 
shall  be  elected  annually  on  the  in 

in  each  year  at  the  office  of  the  company  in  ; 

said  directors  shall  appoint  or  elect  such  officers  as  the  by-laws  may  pre- 
scribe. 

This  corporation  may  become  seized  and  possessed  of  real  and  personal 
estate  of  the  value  of  dollars. 

The  highest  amount  of  indebtedness  or  liability  which  this  corporation 
may  at  any  time  incur  is  the  sum  of  dollars. 

The  private  property  of  the  stockholders  shall  not  be  subject  to  the  pay- 
ment of  corporate  debts  to  any  extent  whatever. 

7.  The  board  of  directors  shall  have  power  without  the  assent  or  vote 
of  the  stockholders  to  make,  alter,  amend  and  rescind  the  by-laws  of  this 
corporation,  to  fix  the  amount  to  be  reserved  as  working  capital,  to  au- 
thorize and  cause  to  be  executed  mortgages  and  liens  without  limit  as  to 
amount  upon  the  real  and  personal  property  of  this  corporation. 

With  the  consent  in  writing  and  pursuant  to  the  vote  of  the  holders 
of  a  majority  of  the  stock  issued  and  outstanding,  the  directors  shall  have 
power  and  authority  to  sell,  assign,  transfer  or  otherwise  dispose  of  the 
whole  property  of  this  corporation. 

The  directors  shall  from  time  to  time  determine  whether  and  to  what 
extent,  and  at  what  times  and  places  and  under  what  conditions  and  regu- 
lations, the  accounts  and  books  of  the  corporation,  or  any  of  them,  shall 
be  open  to  the  inspection  of  the  stockholders;  and  no  stockholder  shall 
have  any  right  of  inspecting  any  account  or  book  or  document  of  the  cor- 
poration, except  as  conferred  by  statute  or  authorized  by  the  directors,  or 
by  a  resolution  of  the  stockholders. 

The  board  of  directors,  in  addition  to  the  powers  and  authorities  by 
statute  and  by  the  by-laws  expressly  conferred  upon  them,  may  exercise 
all  such  powers  and  do  all  such  acts  and  things  as  may  be  exercised  or 
done  by  the  corporation,  but  subject,  nevertheless,  to  the  provisions  of 
the  statute,  of  the  charter,  and  to  any  regulations  that  may  from  time  to 
time  be  made  by  the  stockholders,  provided  that  no  regulations  so  made 
shall  invalidate  any  provisions  of  this  charter,  or  any  prior  acts  of  the 
directors  which  would  have  been  valid  if  such  regulations  had  not  been 
made. 

The  corporation  may  in  its  by-laws  confer  powers  additional  to  the 
foregoing  upon  the  directors,  and  may  prescribe  the  number  necessary 
to  constitute  a  quorum  of  its  board  of  directors,  which  number  may  bo 
less  than  a  majority  of  the  whole  number. 

The  board  of  directors  may,  by  resolution  passed  by  a  majority  of  the 
whole  board,  designate  two  or  more  of  their  number  to  constitute  an 
executive  committee,  which  committee  shall  for  the  time  being,  as  pro- 
vided in  said  resolution  or  in  the  by-laws  of  said  corporation,  have  and 
exercise  all  the  powers  of  the  board  of  directors  in  the  management  of  the 


154  FORMS    AND    PRECEDENTS. 

business  and  affairs  of  the  company,  and  have  power  to  authorize  the  seal 
of  the  corporation  to  be  afifixed  to  all  papers  which  may  require  it. 

Neither  the  directors  nor  the  members  of  the  executive  committee  nor 
the  president  nor  vice-president  shall  be  subject  to  removal  during  their 
respective  terms  of  ofifice  except  for  cause,  nor  shall  their  terms  of  office 
be  diminished  during  their  tenure. 

Both  stockholders  and  directors  shall  have  power  to  hold  meetings,  to 
have  one  or  more  offices,  and  to  keep  the  books  of  the  corporation  (sub- 
ject to  the  provisions  of  the  statute)  outside  of  this  state,  at  such  places 
as  may  be  from  time  to  time  designated  by  them. 

We,  the  undersigned,  for  the  purpose  of  forming  a  corporation  in  pur- 
suance of  an  act  of  the  legislature  of  the  state  of  Delaware,  entitled  "An 
act  providing  a  general  corporation  law,"  do  make,  record  and  file  this 
certificate,  hereby  declaring  and  certifying  that  they  are  all  the  original 
incorporators,  that  the  facts  herein  stated  are  true,  and  do  respectively 
agree  to  take  the  number  of  shares  of  stock  hereinbefore  set  forth,  and 
accordingly  have  hereunto  set  our  hands  and  seals. 


In  presence  of 


[Ten-cent  internal  revenue  stamp  canceled.] 


[l.  s. 
[l.  s. 
[l.  s. 


State  of  ) 

Coimty  of  (  "  ' 

Be  it  remembered  that  on  this  day  of  ,  A.  D.  , 

personally  came  before  me  ,  a  notarj-  public 

for  the  State  of 

parties  to  the  foregoing  certificate  of  incorporation,  known  to  me  person- 
ally to  be  such,  and  severally  acknowledged  the  said  certificate  to  be  the 
act  and  deed  of  the  signers  respectively  and  that  the  facts  therein  stated 
are  truly  set  forth. 

Given  under  my  hand  seal  of  office  the  day  and  year  aforesaid. 

[Internal  revenue  stamp.] 


GENERAL  CLAUSES. 

General  clauses  may  be  used  in  connection  wiih  and  following  special  clauses  which  are  used 
for  designating  the  primary  objects  of  the  company.  As  a  rule  they  will  be  construed  in  connection 
with  special  clauses. 

As  to  the  utility  of  these  clauses,  see  the  following  English  cases:  Peruvian  Railways  Com- 
pany V.  Thames  &  Mersey  M.  1.  Co.,  2  Ch.  617;  Ernest  v.  Nichols,  6  H.  L.  401;  Overend, 
Gurney  &  Co.  v.  Gibbs,  L.  R.  5  H.  L.  480;  In  re  License  Victuallers'  Asso.,  42  C.  Div.  i. 

It  is  wise  to  always  add  appropriate  general  clauses  to  the  special  or  primary  object  clauses  of 
the  company. 


FORMS  AND  PRECEDENTS.  15 


00 


TO  MANUFACTURE  OR  SELL  GENERALLY. 

I.  To  manufacture,  purchase  or  otherwise  acquire,  to  hold,  own,  mort- 
gage, pledge,  sell,  assign  and  transfer,  or  otherwise  dispose  of,  to  invest, 
trade,  deal  in  or  deal  with  goods,  wares,  merchandise  and  property  of 
every  class  and  description. 


TO  CARRY  ON  OTHER  BUSINESS. 


2.  To  carry  on  any  other  business  (whether  manufacturing  or  otherwise) 
which  may  seem  to  the  company  capable  of  being  conveniently  carried  on 
in  connection  with  the  above  or  calculated  directly  or  indirectly  to  en- 
hance the  value  of  the  company's  property  or  rights. 


TO   PURCHASE   PATENTS. 

3.  To  apply  for,  purchase  or  otherwise  acquire,  and  to  hold,  own,  use, 
operate  and  to  sell,  assign  or  otherwise  dispose  of,  to  grant  licenses  in 
respect  of  or  otherwise  turn  to  account,  any  and  all  inventions,  improve- 
ments and  processes  used  in  connection  with,  or  secured  under  letters- 
patent  of  the  United  States  or  elsewhere,  or  otherwise,  and  with  a  view 
to  the  developing  of  the  same,  to  carry  on  any  other  business,  whetlier 
manufacturing  or  otherwise,  which  the  corporation  may  think  calculated 
directly  or  indirectly  to  effectuate  these  objects. 


TO   ACQUIRE    STOCK,    ETC.,    IN    OTHER    COMPANIES. 

4.  To  hold,  purchase  or  otherwise  acquire,  to  sell,  assign,  transfer,  mort- 
gage, pledge  or  otherwise  dispose  of  shares  of  the  capital  stock  or  bonds 
or  other  evidence  of  indebtedness  created  by  other  corporation  or  cor- 
porations, and  while  the  holder  of  such  stock  to  exercise  all  the  rights 
and  privileges  of  ownership,  including  the  right  to  vote  thereon  to  the 
same  extent  as  a  natural  person  might  or  could  do. 


TO    ACQUIRE    OTHER    BUSINESS. 

5.  To  acquire  and  undertake  the  whole  or  any  part  of  the  business,  prop- 
erty, assets  and  liabilities  of  any  person  or  company  carrying  on  any  busi- 
ness which  this  company  is  authorized  to  carry  on,  or  possessed  of  prop- 
erty suitable  for  the  purpose  of  this  company. 


TO   ACQUIRE   STOCK   IN   SIMILAR   CO.MPANIES. 

6.  To  take  or  otherwise  acquire,  and  hold  shares  in  any  other  company 
having  objects  altogether  or  in  part  similar  to  those  of  this  company,  or 
carrying  on  any  business  capable  of  being  conducted  so  as  directly  or  in- 
directly to  benefit  this  company. 


156  FORMS    AND    PRECEDENTS. 


TO   REMUNERATE   FOR   SERVICES. 

7.  To  remunerate  any  person  or  company  for  services  rendered  or  to  be 
rendered,  in  placing  or  assisting  to  place  or  guaranteeing  the  placing  of 
any  of  the  shares  in  the  company's  capital,  or  any  debentures  or  other 
securities  of  the  company,  or  in  or  about  the  formation  or  promotion  of 
the  company  or  the  conduct  of  its  business,  or  otherwise. 


TO   PURCHASE   PROPERTY. 


8.  Generally  to  purchase,  take  on  lease  or  in  exchange,  hire  or  otherwise 
acquire,  any  real  and  personal  property,  and  any  rights  or  privileges 
which  the  company  may  think  necessary  or  convenient  for  the  purposes 
of  its  business. 


TO    CONSTRUCT    WORKS. 

9.  To  construct,  improve,  maintain,  work,  manage,  carry  out,  or  control 
any  roads,  railways,  branches  or  sidings,  bridges,  reservoirs,  water  courses, 
wharves,  manufactories,  warehouses,  works,  shops,  stores  and  other 
works  and  conveniences  which  may  seem  calculated  directly  or  indirectly 
to  advance  the  company's  interests,  and  to  contribute  to,  or  otherwise 
assist  or  take  part  in  the  construction,  improvement,  maintenance,  work- 
ing, management,  carrying  out  or  control  thereof. 


TO    ACT   AS   TRUSTEES,    ETC. 

TO.  To  do  all  or  any  of  above  things  (in  any  part  of  the  world)  as  prin- 
cipals, agents,  contractors,  trustees,  or  otherwise,  and  by  or  through  trus- 
tees, agents  or  otherwise,  and  either  alone  or  in  conjunction  with  others. 


TO   ADOPT   PROMOTER  S  CONTRACT. 

IT.  To  adopt  or  carry  into  effect,  with  or  without  modification,  an  agree- 
ment made  between  A.  of  the  one  part,  and  B.  (on  behalf  of  the  company 
to  be  organized)  of  the  other  part. 


TO   PURCHASE,   HOLD,   ETC.,   REAL  ESTATE. 

12.  To  the  same  extent  as  natural  persons  might  or  could  do,  to  pur- 
chase or  otherwise  acquire,  to  hold,  own,  maintain,  work,  develop,  sell, 
convey,  mortgage,  or  otherwise  dispose  of,  without  limit  as  to  amount, 
within  or  without  the  state  of  Delaware,  and  in  any  part  of  the  world,  real 
estate  and  real  property,  and  any  interest  and  rights  therein. 


TO   CONDUCT    BUSINESS   IN   OTHER    ST.\TES. 

13.  'To  have  one  or  more  offices,  to  carry  on  all,  or  any  part  of  its  opera- 
tions and  business,  and  unlimitedly  and  without  restriction  to  hold,  pur- 


FORMS    AND    PRECEDENTS.  157 

chase,  mortgage,  lease  and  convey  real  and  personal  property  and  to 
conduct  its  business  in  any  state  or  territory  of  the  United  States,  and  in 
any  foreign  country  or  place,  but  subject  always  to  the  laws  thereof. 


TO    CONTROL   AND    MANAGE    OTHER    COMPANIES. 

14.  To  cause  or  allow  the  legal  title,  estate  and  interest  in  any  property 
acquired,  established  or  carried  on  by  the  company  to  remain  or  be  vested. 
or  registered  in  the  name  of,  or  carried  on  by  any  other  company  or  com- 
panies, foreign  or  domestic,  formed  or  to  be  formed,  and  either  upon  trust 
for,  or  as  agents  or  nominees  of  this  company  or  upon  any  other  terms 
or  conditions  which  the  board  of  directors  may  consider  for  the  benefit 
of  this  company,  and  to  manage  the  affairs,  or  take  over  and  carry  on 
the  business  of  such  company  or  companies  so  formed  or  to  be  formed, 
either  by  acquiring  the  shares,  stocks,  or  other  securities  thereof,  or  other- 
wise howsoever,  and  to  exercise  all  or  any  of  the  powers  of  holders  of 
shares,  stocks,  or  securities  thereof,  and  to  receive  and  distribute  as  profits 
the  dividends  and  interest  on  such  shares,  stocks,  or  securities. 


TO    MAKE    CONTRACTS,    ETC. 

15.  To  enter  into,  make,  perform  and  carry  out  contracts  of  every  sort 
and  kind,  with  any  person,  firm,  association,  corporation,  private,  public 
or  municipal,  or  body  politic,  and  with  the  government  of  the  United 
States,  or  any  state,  territory  or  colony  thereof,  or  any  foreign  govern- 
ment; to  purchase,  lease,  exchange,  hire  or  otherwise  acquire  any  and  all 
rights,  privileges,  permits,  or  franchises  suitable  or  convenient  for  any 
of  the  purposes  of  its  business. 


TO   CONSTRUCT  WORKS,   ETC. 

16.  To  purchase,  lease,  exchange,  hire,  or  otherwise  acquire  any  and  all 
rights,  privileges,  permits  or  franchises  suitable  or  convenient  for  any 
of  the  purposes  of  its  business;  to  erect  and  construct,  make,  improve, 
aid  or  subscribe  toward  the  construction,  making  and  improvement  of 
'mills,  factories,  storehouses,  buildings,  roads,  docks,  piers,  wharves, 
houses  for  employes  and  others, and  works  of  all  kinds;  and  in  conjunction 
with  and  in  furtherance  of  the  general  business  and  purpose  of  the  cor- 
poration, as  above  described,  to  construct,  lease,  own,  operate  or  sell 
transportation  line  or  lines,  in  any  state  or  country,  subject  to  the  laws 
of  such  state  or  country,  either  directly  or  through  the  ownership  of  stock 
of  a  corporation  formed,  or  to  be  formed,  for  the  purpose,  under  the  laws 
of  such  state  or  country. 


GENERAL   WORDS. 

17.  That  the  objects  for  which  this  corporation  is  formed  are  to  do  any 
or  all  of  the  things  herein  set  forth  to  the  same  extent  as  natural  persons 


158  FORMS    AND    PRECEDENTS. 

might  or  could  do,  and  in  any  part  of  the  world,  as  principals,  agents, 
trustees  or  otherwise,  and  in  furtherance,  and  not  in  limitation  of  the 
general  powers  conferred  by  the  laws  of  the  state  of  Delaware,  the  cor- 
poration shall  have  also  the  following  powers,  viz.:  (Here  insert  special 
objects.) 

In  general  to  carry  on  any  other  business  (whether  manufacturing  or 
otherwise)  which  may  seem  to  the  corporation  capable  of  being  con- 
veniently carried  on  in  connection  with  the  above,  or  calculated,  directly 
or  indirectly,  to  enhance  the  value  of  or  render  profitable  any  of  the  cor- 
poration's property  or  rights. 

The  objects  specified  in  the  paragraph  hereof  shall,  except 

where  otherwise  expressed  in  said  paragraph,  be  nowise  limited  or  re- 
stricted by  reference  to  or  inference  from  the  terms  of  any  other  clause 
or  other  paragraph  herein. 


SPECIAL  CLAUSES  FOR  PARTICULAR  OBJECTS. 

The  following  special  clauses  are  intended  to  designate  the  primary  or  controlling  object  of  the 
company. 

They  may  be  varied  to  meet  the  necessities  of  each  particular  case,  and  are  suggested  as 
precedents  subject  to  modification. 

As  a  rule  they  may  be  followed  to  advantage  by  one  or  more  general  clauses  appropriate  to 
the  special  clause. 

Form  3. 

L.\XD   AND   GENERAL   INVESTMENT   COMPANIES. 

To  acquire  by  purchase,  lease,  exchange,  hire  or  otherwise,  lands,  or 
any  interest  therein;  to  erect  and  construct  houses,  buildings  or  works  of 
every  description  on  any  land  of  the  company,  or  upon  any  other  lands, 
and  to  rebuild,  enlarge,  alter  and  improve  existing  houses,  buildings  or 
works  thereon,  to  convert  and  appropriate  any  such  land  into  and  for 
roads,  streets  and  other  conveniences,  and  generally  to  deal  with  and  im- 
prove the  property  of  the  company;  to  sell,  lease,  let,  mortgage  or  other- 
wise dispose  of  the  lands,  houses,  buildings,  hereditaments  and  other  prop- 
erty of  the  company;  to  undertake  or  direct  the  management  and  sale  of 
the  property,  building  and  lands;  to  transact  on  commission  the  genera! 
business  of  a  real  estate  agent. 

Form  4. 

BREWING  COMPANIES. 

To  carry  on  the  business  of  brewers  and  maltsters  in  all  its  branches. 

To  carry  on  all  or  any  of  the  businesses  of  hop  merchants  and  growers, 
malt,  wine  and  spirits  merchants  and  importers,  and  distillers,  coopers, 
and  bottlers,  bottle  makers,  manufacturers  of  and  dealers  in  aerated  and 
mineral  waters,  and  all  other  articles  of  like  nature. 

To  buy,  sell,  manipulate,  and  deal,  both  wholesale  and  retail,  in  com- 


FORMS    AND    PRECEDENTS.  159 

modities,  articles  and  things  of  all  kinds  which  can  conveniently  be  dealt 
in  by  the  company  in  connection  with  any  of  its  objects. 

To  enter  into  contracts  with  such  parties,  and  on  such  terms  as  may 
seem  expedient,  and  in  particular  to  customers  of,  and  persons  having 
dealings  with  the  company. 


EonxL  5. 

HOTEL  COMPANY. 

To  purchase,  take  on  lease  or  otherwise  acquire  lands,  or  buildings 
in  or  elsewhere;  to  erect  on  such  lands  as  afore- 

said, or  any  of  them,  hotel  or  hotels,  cottages  and  any  other  necessary 
buildings  and  works,  and  to  use,  convert,  adapt  and  maintain  all  or  any 
of  such  lands,  buildings  and  premises,  to  and  for  the  purposes  of  hotels 
and  inns,  with  their  usual  and  necessary  adjuncts. 

To  fit  up  and  furnish  the  same,  and  to  carry  on  the  business  of  hotel 
and  innkeepers,  and  a  livery  stablekeeper. 


Form  6. 

MANUFACTURING  COMPANIES. 

To  carry  on  the  business  of  manufacturers  of  and  of 

all  kinds,  and  of  all  articles  and  things  used  in  the  manufacture,  main- 
tenance, and  working  thereof,  and  also  all  apparatus  and  implements  and 
things  for  use  in  sports  or  games. 

To  buy,  sell,  repair,  alter,  and  deal  in  apparatus,  machinery,  materials 
and  articles  of  all  kinds,  which  shall  be  capable  of  being  used  for  the  pur- 
pose of  any  business  herein  mentioned,  or  likely  to  be  required  by  cus- 
tomers of  any  such  business. 


Form  7. 

ELECTRIC  LIGHT  COMPANIES. 

To  carry  on  the  business  of  an  electric  light  company  in  all  its 
branches,  and  in  particular  to  construct,  lay  down,  establish,  fix  and  carry 
out  all  necessary  cables,  wires,  lines,  accumulators,  lamps  and  works,  and 
to  generate,  accumulate,  distribute  and  supply  electricity,  and  to  light 
cities,  towns,  streets,  docks,  markets,  theatres,  buildings,  and  places  both 
public  and  private. 

To  carry  on  the  business  of  electricians,  mechanical  engineers,  suppliers 
of  electricity  for  the  purpose  of  light,  heat,  motive  power,  or  otherwise, 
and  manufacturers  of  and  dealers  in  all  apparatus  and  things  required  for 
or  capable  of  being  used  in  connection  with  the  generation,  distribution, 
supply,  accumulation  and  employment  of  electricity. 


l60  FORMS    AND    PRECEDENTS. 

Form  8. 

MINING  COMPANIES. 

To   purchase,   take   on   lease,   or  otherwise  acquire   any   mines,    mining 
rights  and  land  in  or  elsewhere,  and  any  interest  therein, 

and  to  explore,  work,  exercise,  develop,  and  turn  to  account  the  same. 
To  quarry,  smelt,  refine,  dress,  amalgamate  and  prepare  for  market,  ore, 
metal  and  mineral  substances  of  all  kinds,  and  to  carry  on  any  other 
operations  which  may  seem  conducive  to  any  of  the  company's  objects. 
To  buy,  sell,  manufacture  and  deal  in  minerals,  plant,  machinery,  imple- 
ments, conveniences,  provisions  and  things  capable  of  being  used  in  con- 
nection with  mining  operations,  or  required  by  workmen  and  others 
employed  by  the  company.  To  construct,  carry  out,  maintain,  improve, 
manage,  work,  control  and  superintend  any  roads,  ways,  railways,  bridges, 
reservoirs,  water  courses,  aqueducts,  wharves,  furnaces,  mills,  crushing 
works,  hydraulic  works,  works,  factories,  warehouses,  and  other  works 
and  conveniences  which  may  seem  directly  or  indirectly  conducive  to  any 
of  the  objects  of  the  company,  and  to  contribute  to,  subsidize,  or  other- 
wise aid  or  take  part  in  any  such  operations. 


Form  9. 

PRINTING  AND  PUBLISHING  COMPANIES. 

To  acquire,  print,  publish  and  circulate  any  newspaper  or  newspapers, 
or  other  publications,  and  generally  to  carry  on  the  business  of  newspaper 
proprietors  and  printers,  lithographers  and  engravers;  to  build,  construct, 
erect,  purchase,  hire,  or  otherwise  acquire,  or  provide  any  buildings, 
offices,  plant  and  machinery,  or  other  things  necessary  or  useful  for  the 
purpose  of  carrying  out  the  objects  of  the  company. 


Form  10. 

MANUFACTURING  COMPANIES. 
(Fuller  Form.) 

To  purchase,  lease,  or  otherwise  acquire  lands  and  buildings  in 

or  elsewhere  for  the  erection  and  establishment  of  a  manu- 
factory or  manufactories  and  workshops,  with  suitable  plant,  engines  and 
machinery,  with  a  view  to  manufacture,  purchase,  sell  or  otherwise  deal 
in  ,  either  directly  or  indirectly  through  the  medium 

of  agents  or  otherwise;  in  particular  to  acquire  the  business  now  carried 
on  by  ,  with  the  land  and  buildings, 

plant,  stock,  and  other  properties  connected  with  the  business,  and  also 
the  good-will  of  the  said  business,  and  the  benefit  of  all  pending  con- 
tracts, and  the  stock-in-trade  thereof,  together  with  the  patents  and  other 
rights  and  privileges  relating  to  the  said  business,  vested  in  or  held  on 
behalf  of  them;  to  purchase  or  otherwise  acquire  patents,   patent  rights 


FORMS    AND    PRECEDENTS.  l6l 

and  privileges,  improved  or  secret  processes  for  or  in  any  way  relating 
to  all  or  any  of  the  objects  aforesaid,  and  to  grant  licenses  for  the  use  of, 
or  to  sell  or  otherwise  deal  with  any  patents,  patent  rights  and  privileges, 
improved  or  secret  processes  acquired  by  the  company;  to  sell,  lease  or 
otherwise  deal  with  real  and  personal  property  of  the  company. 


Form  11. 
PUBLIC  WORKS. 

To  construct,  equip,  improve,  work,  develop,  manage  or  control  public 
works  and  conveniences  of  all  kinds,  including  railways,  docks,  harbors, 
piers,  wharves,  canals,  reservoirs,  embankments,  improvement,  sewage, 
drainage,  sanitary,  water,  gas,  electric  light,  telephonic,  telegraphic,  and 
power  supply  works  and  hotels,  warehouses,  markets,  and  public  build- 
ings, tunnels,  bridges,  viaducts  and  all  other  works  or  conveniences  of 
public  use  or  utility. 

To  apply  for,  purchase,  or  otherwise  acquire,  any  contracts  and  con- 
cessions, for  or  in  relation  to  the  construction,  execution,  carrying  out, 
equipment,  improvement,  management,  administration,  or  control  of  pub- 
lic works  and  conveniences,  and  to  undertake,  execute,  carry  out.  dispose 
of,  or  otherwise  turn  to  account  the  same. 

To  purchase  or  otherwise  acquire,  issue,  re-issue,  sell,  place,  and  deal 
in  shares,  stocks,  bonds,  debentures  and  securities  of  all  kinds,  and  to 
give  any  guaranty  or  security  for  the  payment  of  dividends  or  interest 
thereon,  or  otherwise,  in  relation  thereto. 


Form  12. 
TO  PURCHASE  AND  WORK  PATENTS. 

To    purchase    or    acquire    the    letters-patent    of   the    United    States    of 
America  granted  to  A.  B.  covering  the  manufacture  of 
and  apparatus  and  machinery  therefor,  dated  ,  Number 

.  and   Number  ,  respectively,  and  any  subsequent  improve- 

ment or  improvements  in  and  upon  the  said  manufacture,  apparatus  and 
machinery  which  may  be  invented  by  the  said  A.  B..  and  all  extensions 
of  the  said  letters-patent  or  any  of  them,  and  also  the  several  letters- 
patent  granted  to  the  said  A.  B.  by  the  governments  of 
and  any  other  letters-patent  which  may  hereafter  be  granted  to  the  said 
A.  B.  by  the  United  States  of  America,  or  by  the  government  of  any 
country  whatsoever,  either  in  respect  of  the  inventions  comprised  by  the 
hereinbefore  mentioned  letters-patent,  or  any  of  them,  or  any  such  further 
inventions  or  improvements  as  before  mentioned,  and  all  extensions 
with  reference  thereto  respectively;  to  carry  on  the  business  of  a  manu- 
facturer of  ;  to  acquire  by  purchase  or  otherwise  for  the 
business  of  the  company  in  any  estate  or  estates,  land  or 
ir 


1 62  FORMS    AND    PRECEDENTS. 

buildings,  mills,  plant,  machinery,  patents,  patent  rights,  secret  processes, 
or  other  things,  and  to  erect  and  maintain,  or  reconstruct  and  adapt 
buildings,  mills,  plant,  machinery,  and  other  things  found  necessary  or 
convenient  for  the  purposes  of  the  company;  to  obtain  letters-patent  or 
similar  privileges  in  this  or  any  other  country  for  any  invention  in  con- 
nection with  the  company's  manufacture  or  business;  to  sell,  lease  or 
otherwise  dispose  of  the  lands,  buildings,  plant,  property  and  effects  of 
the  company;  to  sell  the  patents,  patent  rights,  or  secret  processes  to  be 
acquired  by  the  company,  or  any  of  them,  and  to  grant  licenses  to  use  the 
same  to  any  person  or  persons,  company  or  companies. 


Form  13. 

SECURITIES  AND  INVESTMENTS. 

To  purchase,  receive,  hold  and  own  bonds,  mortgages,  debentures, 
notes,  shares  of  capital  stock,  and  other  securities,  obligations,  contracts 
and  evidences  of  indebtedness  of  any  private,  public  or  municipal  corpo- 
ration, or  of  the  government  of  the  United  States,  or  of  any  state  thereof: 
to  receive,  collect  and  dispose  of  interest,  dividends  and  income  upon,  of 
and  from  any  of  the  bonds,  mortgages,  debentures,  notes,  shares  of  capital 
stock,  securities,  obligations,  contracts,  evidences  of  indebtedness  and 
other  property  held  or  owned  by  it,  and  to  exercise  in  respect  of  all  such 
bonds,  mortgages,  debentures,  notes,  shares  of  capital  stock,  securities, 
obligations,  contracts,  evidences  of  indebtedness  and  other  property,  any 
and  all  the  rights,  powers  and  privileges  of  individual  owners  thereof, 
to  do  any  and  all  acts  and  things  tending  to  increase  the  value  of  the 
property  at  any  time  held  by  the  company;  to  issue  bonds  and  to  secure 
the  same  by  pledges  or  deeds  of  trust  or  mortgages  of  or  upon  the  whole 
or  any  part  of  the  property  held  by  the  company,  and  to  sell  or  pledge 
such  bonds  for  proper  corporate  purposes,  as  and  when  the  board  of 
directors  shall  determine;  and,  in  the  promotion  of  its  said  corporate  busi- 
ness of  investment,  and  to  the  extent  authorized  by  law,  to  lease,  purchase, 
hold,  sell,  assign,  transfer,  pledge,  mortgage  and  convey  real  and  personal 
property  of  any  name  and  nature;  but  nothing  herein  is  to  be  construed 
as  intended  to  form  a  banking  company,  a  savings  bank  or  a  corporation 
intended  as  a  part  of  its  business  to  derive  profit  from  the  loan  and  use 
of  money. 


Form  14. 

WATER  POWER. 

To  purchase,  acquire,  hold,  lease,  manage,  control  and  operate,  and  to 
sell,  lease  and  dispose  of  to  such  person  or  persons,  corporation  or  cor- 
porations, and  for  such  price  or  prices,  and  on  such  terms  and  conditions, 
as  to  this  corporation  may  seem  proper,  water,  water  rights,  power,  priv- 


FORMS    AND    PRECEDENTS;  163 

ileges  and  appropriations,  for  mining,  milling,  agricultural,  domestic  and 
other  uses  and  purposes;  and  to  develop,  control,  generally  deal  in  and 
dispose  of  to  such  person  or  persons,  corporation  or  corporations,  and  for 
such  price  or  prices,  and  on  such  terms  and  conditions  as  to  this  corpora- 
tion may  seem  proper,  electrical  and  other  power,  for  the  generation,  dis- 
tribution and  supply  of  electricity  for  light  and  heat,  and  for  any  other 
uses  and  purposes  to  which  the  same  are  adapted. 


Form  15. 

BUILDING  CONTRACTORS. 

To  make,  enter  into,  perform  and  carry  out  contracts  for  constructing, 
altering,  decorating,  maintaining,  furnishing,  fitting  up  and  improving 
buildings  of  every  sort  and  kind;  to  advance  money  to  and  enter  into  con- 
tracts and  arrangements  of  all  kinds  with  builders,  property  owners  and 
others;  to  carry  on  in  all  their  respective  branches  the  business  of  build- 
ers, contractors,  decorators,  dealers  in  stone,  brick,  timber,  hardware, 
and  other  building  materials  or  requisites;  to  purchase  for  investment  or 
resale,  and  to  sell  houses,  lands,  real  property  of  all  kinds  and  any  inter- 
est therein,  and  generally  to  deal  in,  sell,  lease,  exchange  or  otherwise 
deal  with  lands,  buildings  and  any  other  property,  whether  real  or  per- 
sonal. 


Form  16. 

FREIGHT  AGENTS. 

General  shipping  and  forwarding  business,  to  wit;  The  receiving, 
handling,  shipping,  forwarding  and  transporting  of  goods,  wares,  mer- 
chandise and  all  classes  of  freight  by  land  or  water. 


Form  17. 

TYPEWRITING  MACHINES. 

To  carry  on  the  business  of  manufacturing,  buying,  selling,  operating 
and  distributing  writing  machines,  typewriters,  typewriter  materials,  ap- 
pliances and  inventions,  and  all  other  materials  and  articles  connected 
with,  or  in  anywise  relating  to  the  manufacture,  sale  or  use  of  writing 
machines  and  typewriters;  to  establish  and  maintain  manufactories, 
agencies  and  depots  for  the  manufacture,  purchase,  sale,  exchange,  de- 
livery and  distribution  of  writing  machines,  typewriters  and  typewriter 
appliances  and  supplies;  to  purchase,  receive,  hold,  sell,  assign,  license 
to  use.  or  otherwise  dispose  of,  any  patents  for  inventions,  discoveries  or 
rights  therein,  owned,  operated,  used,  or  employed  in  the  business  of 
manufacturing,  buying,  selling,  or  using  writing  machines,  typewriters  or 
typewriter  supplies. 


164  FORMS    AND    PRECEDENTS. 

Form  18. 

BUILDING  MATERIALS. 

To  manufacture,  buy.  sell,  deal  and  trade  in  any  and  every  kind  of 
bricks,  stone,  and  building  materials  and  supplies;  to  transport  bricks, 
building  materials,  goods  and  merchandise  by  land  or  water,  and  for  that 
purpose  to  purchase,  own  or  charter,  and  operate,  steam  boats,  steam 
tugs,  barges  and  other  boats. 


Form  19. 

FURNITURE. 

To  manufacture,  buy,  sell  and  otherwise  dispose  of  chairs,  furniture, 
railway  fixtures  and  appliances,  mats,  rugs,  carpets  and  machinery  and 
any  and  all  kinds  of  same,  and  to  sell  and  manufacture  any  and  all  goods 
or  materials  used  therein  or  any  of  them;  to  deal  in  rattans  and  all  pro- 
ducts thereof;  to  purchase,  sell  or  control  patents,  and  to  acquire  and 
own  licenses  under  patents  or  patent  rights,  and  to  grant  license,  or 
licenses  to  other  person  or  persons,  corporation  or  corporations,  to 
manufacture  and  sell  said  patented  articles  or  appliances  or  machinerj' 
under  any  or  all  patents  or  licenses  which  it  may  own  or  have  any  in- 
terest in  or  may  hereafter  acquire,  and  also  to  buy  and  sell  patents  or 
patent  rights  of  any  nature  or  kind,  and  to  grant  licenses  thereunder,  and 
to  do  any  and  all  other  business  which  is  lawful  and  not  contrary  to  the 
statute  laws  of  the  state  of  Delaware,  and  to  establish  agencies  or  branches 
in  any  and  all  places  it  may  see  fit  and  to  do  any  and  all  lawful  business 
incidental  to  or  in  any  way  connected  with  said  purposes  or  any  of  them. 


Form  20. 

TYPESETTING  MACHINES. 

The  object  for  which  the  corporation  is  formed  are  the  purchase,  manu- 
facture, sale  and  letting  of  machinery  and  instrumentalities  and  all  other 
materials  and  objects  used  in  the  art  of  printing  and  all  improvements 
thereon  and  substitutes  therefor,  and  all  materials  used  in  manufacturing 
the  same;  and  also  acquiring  and  disposing  of  rights  to  manufacture,  use 
and  sell  or  otherwise  dispose  of  rights  to  manufacture,  use  and  sell  or 
otherwise  dispose  of  such  machines,  instrumentalities  and  materials:  and 
also  transacting  other  kinds  of  business  incidental  thereto  or  which  may 
be  profitably  carried  on  in  connection  therewith. 


Form  21, 

CHEMICALS. 

To  manufacture,  buy.  sell,  deal  in  and  use  alkalies  and  chemicals  of  all 
kinds  and  all  articles  and  things  used  in  the  manufacture,  maintenance 


FORMS    AND    PRECEDENTS.  165 

and  working  thereof,  and  also  all  apparatus  and  implements  and  things 
for  use  either  alone  or  in  connection  with  products  of  which  they  are  in- 
gredients or  in  the  manufacture  of  which  they  are  a  factor. 


rorm  22. 

GRAIN  ELEVATOR. 

To  buy  and  lease  lands,  and  to  erect  thereon  buildings  and  machinery 
for  the  purpose  of  receiving,  warehousing  and  delivering  grain  and  other 
merchandise;  to  issue  bonds,  secured  by  a  mortgage  or  mortgages  upon 
the  property  and  franchises  of  said  company,  with  the  proceeds  of  which 
to  erect  suitable  buildings  and  purchase  machinery  for  said  purposes,  and 
to  fit  up,  occupy,  and  use  a  grain  elevator,  or  elevators,  and  to  carry  on 
the  business  of  receiving,  handling,  and  storing  of  grain  and  other  mer- 
chandise and  of  issuing  receipts  for  grain  and  merchandise  received,  and 
charging  to  and  collecting  from  the  owners  or  holders  thereof  reasonable 
charges  for  services  done  and  performed  in  and  about  the  receipt,  hand- 
ling, and  storage  of  grain  and  other  merchandise. 


rorm  23. 

TOBACCO  COMPANY. 

The  objects  for  which  this  company  is  formed  are  to  cure  leaf  tobacco, 
and  to  buy,  manufacture  and  sell  tobacco  in  any  and  all  its  forms,  and 
to  erect  or  otherwise  acquire  factories  and  buildings;  to  establish,  main- 
tain and  operate  factories,  warehouses,  agencies  and  depots  for  the  storing, 
preparation,  cure  and  manufacture  of  tobacco,  and  for  its  sale  and  dis- 
tribution, and  to  transport  or  cause  the  same  to  be  transported,  as  an 
article  of  commerce,  and  to  do  any  and  all  things  incidental  to  the  business 
of  trading  and  manufacturing  aforesaid. 


Form  24. 

CORDAGE. 

The  objects  for  which  said  company  is  formed  are  as  follows,  viz.:  The 
manufacture  and  sale  of  cordage  and  binder  twine,  and  any  and  all  similar 
commodities,  including  the  acquisition  by  purchase,  manufacture  or  cul- 
tivation of  all  materials,  supplies,  machinery  and  other  articles  necessary 
or  convenient  for  use  in  connection  with  and  in  carrying  on  the  business 
of  manufacture  and  sales  as  aforesaid;  the  taking,  acquisition,  buying, 
holding,  owning,  selling,  leasing,  mortgaging,  improving,  cultivating  and 
otherwise  dealing  in  and  disposing  of  real  estate,  manufactories,  buildings 
and  improvements  necessary  or  convenient  in  carrying  on  said  business. 


l66  FORMS    AND    PRECEDENTS. 

Form  25. 

IRON. 

To  buy,  sell,  deal  in  and  deal  with  iron  and  iron  ore,  and  all  like  or 
kindred  products;  to  mine,  manufacture,  prepare  for  market,  market  and 
sell  the  same,  and  any  articles  or  product  in  the  manufacture  or  compo- 
sition of  which  metal  is  a  factor,  including  the  acquisition  by  purchase, 
mining,  manufacture  or  otherwise  of  all  materials,  supplies  and  other 
articles  necessary  or  convenient  for  use  in  connection  with  and  in  carrying 
on  the  business  herein  mentioned,  or  any  part  thereof. 

To  purchase,  take  or  lease,  or  otherwise  acquire  any  mines,  mining- 
rights  and  land  in  the  United  States  or  elsewhere,  and  any  interest  therein, 
and  to  explore,  work,  exercise,  develop  and  turn  to  account  the  same:  to 
quarry,  smelt,  refine,  dress,  amalgamate  and  prepare  for  market,  ore.  metal 
and  mineral  substances  of  all  kinds,  and  to  carry  on  any  other  operations 
which  may  seem  conducive  to  any  of  the  company's  objects;  to  buy.  sell, 
manufacture  and  deal  in  minerals,  plant,  machinery,  implements,  conveni- 
ences, provisions  and  things  capable  of  being  used  in  connection  with 
mining  operations  or  required  by  workmen  and  others  employed  by  the 
company. 

Form  26. 
THREAD. 
To  manufacture  cotton,  linen,  wool  and  other  threads,  cloths,  fabrics, 
and  other  manufactures,  articles  and  goods  composed  in  the  whole,  or 
in  part,  of  cotton,  flax,  hemp,  silk,  wool  or  other  material;  to  buy,  grow, 
prepare  and  sell  the  stock  and  raw  material  for  said  manufactures  and 
to  purchase  or  manufacture  blocks,  spools,  bobbins,  boxes,  tickets,  labels, 
wrappers,  show  cards,  machines,  tools,  and  other  appliances,  articles  or 
products  whatsoever  required  in  and  connected  with  the  said  business, 
and  the  trading  in,  dealing  in,  selling  and  disposing  of  the  articles  pur- 
chased or  manufactured  by  the  company. 


Form  27. 
COTTON  COMPANY. 
The  objects  for  which  the  company  is  formed  are  the  buying  of  seed 
cotton,  the  ginning  and  cleaning  of  same,  both  cotton  and  seed,  the  baling 
of  cotton  by  mechanical  process,  the  manufacture  of  machinery  for  the 
purposes  named  and  all  business  connected  with  and  collateral  thereto. 
including  the  selling,  shipping  and  warehousing  of  the  products. 


Form  28. 
LEATHER. 
That  the  objects  for  which  the  company  is  formed  are  the  manufacture 
and  sale  of  leather,  lumber  and  belting,  including  the  acquisition  and  use 


FORMS    AND    PRECEDENTS.  167 

in  the  manner  and  to  the  extent  permitted  by  law  of  all  necessary  and 
convenient  lands,  timber,  bark,  mills,  plants,  machinery,  supplies  and 
other  property  necessary  to  or  convenient  in  connection  with  the  manu- 
facturing and  sale  of  leather,  lumber  and  belting,  as  aforesaid;  and  in 
general,  the  engagement  in  any  and  all  lawful  business  whatever,  which 
may  be  found  convenient  or  necessary  in  connection  with  the  business 
of  manufacturing  and  selling  leather,  lumber  and  belting  as  aforesaid,  in 
the  state  of  Delaware  and  other  states  and  territories  of  the  United  States 
and  elsewhere. 


Form  29. 

THEATRICAL. 

To  purchase,  own,  produce,  and  present,  and  to  license  others  to  pro- 
duce and  present,  theatrical  plays  and  operas,  and  to  acquire  and  hold, 
sell,  assign  and  transfer,  copyrighted  and  uncopyrighted  plays  and  operas. 


Form  30. 

SUGAR. 


The  purchase,  manufacture,  refining  and  sale  of  sugar,  molasses  and 
melada  and  all  lawful  business  incidental  thereto. 


Form  31. 

DISTILLERS. 

To  manufacture,  buy,  sell,  deal  in,  distribute,  store,  warehouse  and  ex- 
port whisky  of  all  kinds,  high  wines,  alcohol,  spirits  and  gins  of  all  kinds, 
and  all  kinds  of  distillery  products  and  by-products  thereof;  to  carry  on 
the  general  business  of  distilling,  re-distilling  and  rectifying  high  wines, 
spirits  and  alcohol,  and  of  compounding  and  blending  of  gins  and  whiskies 
of  all  kinds;  to  mantifacture,  buy,  sell,  deal  in,  store,  warehouse,  distribute 
and  export  grain,  molasses  and  all  articles  used  in  connection  with  the 
operation  of  a  distillery,  and  to  manufacture,  buy,  sell,  deal  in,  distribute, 
store,  warehouse  and  export  all  products  or  by-products  of  sttch  articles; 
to  do  a  general  warehouse  and  storage  business;  to  do  a  general  cooper- 
age business;  to  issue,  register,  certify  and  guarantee  warehouse  receipts; 
to  feed  cattle;  to  carry  or  transport  or  cause  to  be  carried  or  transported 
any  of  the  property  above  referred  to. 


Form  32. 

MERCANTILE  AGENCY. 
To   establish,   maintain   and    conduct   a   general   mercantile   agency,    to 
carry  on  every  branch  of  business  usually  transacted  in  connection  there- 
with, including  the  obtaining  and  acquiring  by  purchase  or  in  any  other 


l68  FORMS    AND    PRECEDENTS. 

lawful  manner  information,  statistics,  facts  and  circumstances  of,  relating 
to,  or  affecting  the  business,  capital,  debt,  solvency,  credit,  responsibility 
and  commercial  condition  and  standing  of  any  and  all  individuals,  firms, 
associations  and  corporations  engaged  in  or  connected  with  any  business, 
occupation,  industry  or  employment  in  any  part  of  the  civilized  world, 
and  particularly  in  and  throughout  the  United  States  and  Canada,  and  to 
dispose  of.  sell,  loan,  pledge,  hire  and  use  in  any  and  all  lawful  ways  the 
information,  statistics,  facts  and  circumstances  so  obtained  and  acquired, 
also  to  establish,  maintain  and  conduct  a  general  collection  business  for 
the  recovery,  enforcement  and  collection  of  accounts,  bills,  debts,  dues, 
demands  and  obligations  and  claims  of  all  kinds,  also  to  establish  and  con- 
duct a  general  business  of  making  and  issuing  contracts  to  secure  the 
faithful  performance  of  any  mercantile  or  commercial  contract  or  agree- 
ment, and  for  the  prompt  payment  of  any  debt  or  obligation  dvie  under  or 
arising  from  or  out  of  any  mercantile  or  commercial  transaction;  also  to 
acquire  by  purchase  or  otherwise  and  to  establish,  maintain  and  conduct 
a  general  printing,  publishing,  bookbinding  and  advertising  business,  and 
to  prepare  and  distribute  newspapers,  books,  pamphlets,  directories,  cata- 
logues, reports,  ratings,  digest,  lists  and  other  printed  matter  of  interest 
or  use  to  merchants,  traders,  bankers  and  lawyers. 


Form  33. 

STATIONERS.  ETC. 

To  carry  on  the  business  of  stationers,  printers,  lithographers,  electro- 
typers,  engravers,  die  sinkers,  envelope  manufacturers,  bookbinders,  book 
manufacturers;  to  carry  on  the  business  of  booksellers,  publishers  and 
dealers  in  the  materials  used  in  the  manufacture  of  paper,  and  dealers  in 
or  manufacturers  of  any  other  articles  or  things  of  a  character  similar  or 
analogous  to  the  foregoing,  or  any  of  them  or  connected  therewith. 


Form  34. 

ELECTRIC. 
To  carry  on  the  business  of  electricians,  mechanical  engineers  and 
manufacturers,  and  workers  and  dealers  in  electricity,  motive  power,  heat 
and  light,  and  any  business  in  which  the  application  of  electricity  or  any 
power,  like  or  otherwise,  is  or  may  be  useful,  convenient  or  ornamental, 
or  any  other  business  of  a  like  nature,  and  tc  manufacture  and  produce, 
and,  either  as  principals  or  agents,  trade  and  deal  in  and  deal  with  any 
article  belonging  to  any  such  business,  and  all  apparatus,  appliances  and 
things  used  in  connection  therewith,  or  with  any  inventions  or  patents; 
to  produce  and  accumulate  electricity  and  electromotive  force,  or  other 
agency,  similar  or  otherwise,  and  to  supply  the  same  for  the  production, 
transmission  or  use  of  power  for  lighting,  heating  and  motive  purposes 
or  otherwise,  as  may  be  thought  advisable,  and  to  light  streets,  places  and 


FORMS    AND    PRECEDENTS.  169 

buildings,  public  or  private,  by  means  of  electricity,  or  otherwise,  or  to  en- 
able the  same  so  to  be  lighted;  to  construct,  maintain  and  operate  works, 
for  the  supply  and  distribution  of  electricity  for  light,  heat  and  power; 
to  carry  on  the  business  of  suppliers  of  light,  heat  and  power  and  carriers 
of  passengers  and  goods  by  land  and  by  water  in  all  its  branches;  to  ac- 
quire by  purchase  or  otherwise,  maintain,  equip,  operate  and  build  street 
and  other  railways  operated  by  electricity  or  otherwise;  to  use  or  manu- 
facture, operate  and  equip  telephones,  telegraphs,  phonographs  and  all 
electrical  apparatus  now  known,  or  that  may  hereafter  be  invented,  includ- 
ing all  wires  or  appliances  for  connecting  electric  apparatus  at  a  distance 
with  other  electric  apparatus,  and  including  the  formation  of  electric  ex- 
changes or  centres;  to  acquire,  by  purchase  or  otherwise,  and  to  use,  oper- 
ate and  equip  subways,  conduits  and  ducts,  and  to  obtain,  accept  and  use 
all  permits  and  also  franchises,  municipal  or  otherwise;  to  purchase  or 
otherwise  acquire  and  to  sell,  work  or  otherwise  deal  with  land,  water, 
water-power,  water-power  supplies  and  water-power  work  and  equipment, 
or  works;  to  undertake,  construct,  acquire  and  carry  on  works  of  all  kinds 
relating  to  any  business  of  the  company,  and  to  enter  into  such  contracts 
and  make  such  arrangements  as  may  be  necessary  to  carry  out  the  same. 

To  carry  on  the  business  of  an  electric  light  company  in  all  its  branches, 
and  to  construct,  lay  down,  establish,  fix  and  carry  out  all  necessary  cables, 
wires,  lines,  accumulators,  lamps  and  works,  appurtenances  and  appliances. 


Form  35. 

NEWSPAPERS. 

To  carry  on  business  as  proprietors  and  publishers  of  newspapers,  jour- 
nals, magazines,  books  and  other  literary  works  and  undertakings  and 
especially  to  take  over  the  publication  known  as  the 

to  carry  on  business  as  printers,  booksellers,  bookbinders,  stationers, 
photographers,  photographic  printers,  stereotypers,  electrotypers,  lith- 
ographers, and  any  other  business  or  manufacture  that  may  seem  expedi- 
ent; to  undertake  and  transact  all  kinds  of  business  relative  to  the  gather- 
ing and  distribution  of  information  of  every  sort  and  kind  to  the  same 
extent  that  a  natural  person  might  or  could  do,  and  in  connection  there- 
with to  acquire  by  purchase  or  otherwise,  construct,  maintain  and  other- 
wise deal  with  land  and  submarine  telegraphs,  including  in  such  expres- 
sion telephone  and  all  other  electrical  or  other  contrivances  for  transmit- 
ting messages  by  signal;  lands,  works,  buildings  and  conveniences  in  any 
part  of  the  world. 


Form  36. 

SMELTERS  AND  REFINERS. 

To  acquire,   deal  in,   sell  and   otherwise  dispose  of  ores,   minerals   and 
metals;   to  smelt,  reduce,  refine,   mill   and  otherwise   treat  ores,   minerals 


170  FORMS    AND    PRECEDENTS. 

and  metals;  and  to  manufacture,  acquire,  deal  in,  sell  and  otherwise  dis- 
pose of  products  of  ores,  minerals  and  metals. 


Form  37. 

ELECTRICAL  MACHINERY. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  electric  motors, 
dynamos  and  other  electrical  machinery,  appliances  and  plants,  and  to 
buy,  sell,  manufacture,  repair,  convert,  alter,  let  or  hire,  and  deal  in  elec- 
trical appliances  and  goods  of  every  kind  and  character,  and  machinery 
of  all  manner  or  kind. 

To  produce  and  accumulate  electricity  and  electromotive  force,  and  to 
supply  the  same  for  the  production,  transmission  or  use  of  power  for 
lighting,  heating  and  motive  purposes  or  otherwise,  as  may  be  thought 
advisable,  and  to  light  streets,  places  and  buildings,  public  or  private,  by 
means  of  electricity  or  otherwise,  or  to  enable  the  same  to  be  so  lighted. 


Form  38. 

NEWSPAPER  AND  PUBLISHING. 

To  acquire,  print,  publish,  conduct  and  circulate  or  otherwise  deal  with 
any  newspaper  or  newspapers  or  other  publications,  and  generally  to  carry 
on  the  business  of  newspaper  proprietors  and  general  publishers;  to  carry 
on,  if  and  when  it  shall  seem  desirable,  the  trade  or  business  of  general 
printers,  lithographers,  engravers  and  advertising  agents;  to  build,  con- 
struct, erect,  purchase,  hire,  or  otherwise  acquire  or  provide  any  buildings, 
offices,  workshops,  plant  and  machinery  or  other  things  necessary  or  use- 
ful for  the  purpose  of  carrying  out  the  objects  of  the  company. 


Form  39. 

SHIPPING. 

To  construct,  hire,  purchase  and  operate  steamships  and  other  vessels 
of  any  class,  and  to  establish  and  maintain  lines  or  regular  services  of 
steamships  or  other  vessels,  and  generally  to  carry  on  the  business  of 
shipowners,  and  to  enter  into  contracts  for  the  carriage  of  mails,  passen- 
gers, goods  and  merchandise  by  any  means,  either  by  its  own  vessels, 
railways  and  conveyances,  or  by  or  over  the  vessels,  conveyances  and 
railways  of  others;  to  construct,  purchase,  take  on  lease,  or  otherwise 
acquire  and  work  any  railway,  wharf,  pier,  dock,  buildings  or  works 
capable  of  being  advantageously  used  in  connection  with  the  business  of 
the  company  as  a  shipping  company;  in  connection  with  any  of  the  ob- 
jects aforesaid  to  carry  on  the  business  of  a  railway  company,  railway 
contractors,  shipbuilders,  engineers,  manufacturers  of  machinerj'  and  car- 
buij-der;   to   acquire   concessions   or   licenses   for   the   establishment    and 


FORMS    AND    PRECEDENTS.  I /I 

working  of  lines  of  steamships  or  sailing  vessels  between  any  ports  of  the 
world,  or  for  the  formation  or  working  of  any  railway,  wharf,  pier,  dock, 
or  other  works,  or  for  the  working  of  any  public  conveyances. 


Form  40. 

ELECTRIC  LIGHTING. 

To  manufacture,  generate,  buy,  sell,  accumulate,  store,  transmit,  furnish 
and  distribute  electric  current  for  light,  heat  and  power. 

To  manufacture,  buy,  sell,  lease,  let  or  operate  any  or  all  machinery 
or  appliances  for  the  manufacture,  generation,  storage,  accumulation, 
transmission  or  distribution  of  any  or  all  types  of  electric  current,  and 
any  or  all  manner  of  electric  machinery,  apparatus  or  supplies  of  any 
nature  or  kind  whatsoever. 

To  erect,  buy,  sell,  operate,  lease  and  let  power  plants  and  generating 
stations  for  the  manufacture,  generation,  accumulation,  storage,  trans- 
mission and  distribution  of  electric  current  and  any  or  all  machinery  used 
therein  or  in  connection  therewith. 

To  manufacture,  buy,  sell,  lease  and  let  fixtures,  chandeliers,  electroliers, 
brackets,  lamps,  globes,  and  other  supplies  and  appurtenances  used  for 
or  in  connection  with  the  manufacture,  generation,  accumulation,  storage, 
transmission,  distribution  or  use  of  electric  current  for  light,  heat,  or 
power,  or  otherwise,  and  to  carry  on  a  general  business  of  electricians, 
mechanical  engineers,  suppliers  of  electricity  for  the  purpose  of  light, 
heat  or  power,  or  otherwise,  and  install,  erect  and  operate,  sell  or  lease 
wires,  cables  and  fixtures,  both  interior  and  exterior,  for  the  transmission 
and  use  of  electric  current:  and  to  manufacture  and  deal  in  all  apparatus 
and  things  required  for  or  capable  of  being  used  in  connection  with  the 
generation,  distribution,  supply,  accumulation  and  employment  of  elec- 
tricity. 

To  buy,  sell,  operate  or  lease  pole  lines,  erect  poles,  string  wires 
thereon,  or  on  poles  of  other  individuals  or  corporations,  on  any  and  all 
streets,  avenues,  highways  and  roads  of  counties,  townships,  towns,  vil- 
lages and  cities,  and  over  or  under  all  canals  and  other  waterways,  and 
across  any  and  all  bridges,  and  to  use  the  same  either  lor  the  transmis- 
sion of  electric  current  for  delivery  to  consumers  on  such  lines  or  for 
transmission  of  current  to  independent  vendors  thereof,  and  to  sell  or 
lease  to  other  individuals  or  corporations  the  right  to  string  electric 
wires  on  or  attach  electric  wires  to  any  or  all  poles  so  erected,  owned  or 
leased,  and  to  use  such  lines  both  as  through  lines  and  for  local  delivery. 

To  build  and  construct  and  use,  for  any  of  the  purposes  stated  above, 
underground  subways  or  conduits  in  such  streets,  avenues,  highways  and 
roads,  and  under  such  canals  and  other  waterways,  and  string  electric 
wires  or  conductors  therein,  and  to  buy  or  lease  from,  or  sell  or  let  to 
any  other  individual  or  corporation  the  right  to  string  and  to  use  as 
aforesaid  electric  wires  or  conductors  in  any  such  subways. 


172  FORMS    AND    PRECEDENTS. 

rorm  41. 

PAPER. 

To  carry  on  the  business  of  importers  of,  dealers  in  and  manufacturers 
of  paper,  paper  materials  and  paper  substitutes  of  all  kinds,  and  of  the 
raw  substances,  pulps,  preparations,  mixtures,  solvents  and  combinations 
thereof  for  any  purpose  whatsoever,  and  articles  and  substances  made 
from  any  kind  of  paper,  pulp,  mixture,  combination,  solvent,  preparation 
or  material  used  in  the  manufacture  or  treatment  of  paper  or  paper  sub- 
stitutes; also  the  business  of  stationers,  lithographers,  publishers,  wall 
and  ceiling  paper  manufacturers,  and  paper  stainers;  also  the  business 
of  importers  and  dealers  in  and  manufacturers  of  cotton,  silk,  woolen, 
linen,  jute,  textile,  fibrous  and  all  other  materials  and  the  yarns  and  other 
products  and  materials  made  therefrom,  and  all  kinds  of  fabrics,  sub- 
stances, articles  and  things  manufactured  from  such  yarns,  products  and 
materials;  the  importing  of,  dealing  in.  and  manufacturing  of  all  kinds  of 
imitation  leathers  and  rubbers,  waterproof  goods  and  all  other  articles 
made  from  any  such  fabrics,  substances,  articles  and  things;  also  the  busi- 
ness of  manufacturers  and  importers  of  and  dealers  in  paints,  varnishes, 
printing  inks,  and  all  other  articles  and  things  which  can  be  conveniently 
manufactured,  imported  or  dealt  in  by  persons  carrying  on  any  of  the 
above  businesses. 


Form  42. 

SHIP-BUILDING. 

To  build  operate,  maintain,  buy,  sell,  deal  in  and  with,  own,  lease,  pledge 
and  otherwise  dispose  of  ships,  vessels  and  boats  of  every  nature  and  kind 
whatsoever,  together  with  all  materials,  articles,  tools,  machinery  and 
appliances  entering  into,  or  suitable  and  convenient  for  the  construction 
or  equipment  thereof,  and  together  with  engines,  boilers,  machinery  and 
appurtenances  of  all  kinds,  and  tackle,  apparel,  and  furniture  of  all  kinds; 
the  transportation  of  goods,  merchandise  and  passengers  upon  land  or 
water;  building,  repairing  and  designing  houses,  structures,  vessels,  ships, 
boats,  wharves,  docks,  dry-docks,  railroads,  engines,  cars,  machinery  and 
all  other  equipment;  constructing,  maintaining  and  operating  railroads; 
to  build,  construct,  repair,  maintain  and  operate  water,  gas  or  electrical 
works,  tunnels,  bridges,  viaducts,  canals,  wharves,  piers  and  like  works 
of  internal  improvement  or  public  use  or  utility;  to  own,  operate  and  main- 
tain steamship  lines,  vessel  lines  or  other  lines  for  transportation. 


Form  43. 

ELECTRIC  VEHICLES. 

To  acquire  by  purchase,  lease  or  otherwise,  and  to  manufacture  and 
construct  vehicles  of  every  and  any  kind  or  character  used  or  useful  as  a 


FORMS    AND    PRECEDENTS.  173 

means  of  conveying,  delivering,  moving,  carrying  and  transporting  per- 
sons, goods,  chattels,  products,  substances  and  property  of  any  and  every 
kind  and  character  and  equip  and  install  the  same  for  use  and  operation 
by  electricity,  compressed  air,  oil,  gas  or  any  other  means  of  motive 
power,  either  singly  or  in  combination  thereof  and  to  operate,  use,  sell, 
lease  and  hire  the  same,  and  to  contract  with  corporations,  firms,  asso- 
ciations or  individuals  for  operating,  using,  selling,  leasing  and  hiring  the 
same;  to  manufacture,  purchase,  own,  lease,  hire,  erect,  construct,  equip, 
install,  use,  sell  and  dispose  of  all  machines,  compressors,  generators, 
storage  batteries,  pumps,  motors,  structures,  primary  and  secondary  bat- 
teries, apparatus,  instruments,  fixtures  and  appliances  for  the  manufac- 
ture, production,  generation,  distribution,  use,  supply  and  application  of 
electricity,  compressed  air,  oil,  gas  or  other  motive  power,  either  singly 
or  in  combination  thereof,  or  any  or  either  of  them,  or  any  part  or  parts 
thereof. 


Form  44. 

POTTERY. 

To  manufacture,  buy,  sell,  trade  and  deal  in  any  and  every  kind  or  class 
of  pottery  or  earthen  products,  or  articles  composed  in  whole  or  in  part 
of  kaolin,  clay  or  earthy  matter;  to  mine,  manufacture,  prepare,  buy,  sell, 
deal  and  trade  in  any  and  every  gaseous  or  other  ingredient,  material  or 
substance  entering  into  such  manufacture,  or  used  in  conjunction  there- 
with, or  used  in  or  about  businesses  similar  to  or  relating  thereto. 


Form  45. 

RAILWAY  CARS. 

The  objects  for  which,  and  for  any  of  which,  the  corporation  is  formed. 
are  the  manufacturing  and  sale  of  railway  cars,  passenger,  freight  and 
street  cars;  the  manufacturing  and  sale  of  car  trucks,  car  wheels,  and  any 
and  all  parts  of  car  or  car  trucks,  including  truck  frames  and  all  the  ac- 
cessories thereto,  and  all  car  equipments  and  appliances  and  specialties; 
the  manufacture  and  sale  of  all  the  products  of  steel  or  of  iron  or  of  other 
metals,  and  of  wood,  or  of  any  or  all  other  materials;  the  manufacture  and 
sale  of  iron  castings,  steel  castings,  journal  bearings,  malleable  iron,  the 
manufacturing  and  sale  of  all  kinds  of  springs,  including  car  springs;  the 
manufacturing  and  sale  of  all  kinds  of  water  pipes  and  gas  pipes,  or  other 
pipes;  to  manufacture,  purchase,  or  otherwise  acquire,  to  hold,  mortgage, 
pledge,  sell,  assign  and  transfer,  or  otherwise  dispose  of,  to  invest,  trade, 
deal  in  and  with  the  products,  materials,  goods,  wares  and  merchandise 
and  property  of  every  class  and  description,  including  the  right  to  enter 
into  and  upon  any  and  all  mercantile  business  or  businesses,  and  for  that 
purpose  to  acquire  by  purchase,  lease  or  otherwise  stores  or  property 
available  therefor,  and  to  operate  and  maintain  any  and  all  stores  or  ware- 


174  FORMS    AND    PRECEDENTS. 

houses  or  business  houses  necessary  or  expedient  for  such  purpose;  to 
make,  purchase,  sell  and  deal  in  manufactured  articles  and  to  acquire  and 
dispose  of  rights  to  make  and  use  the  same;  to  purchase,  lease  or  other- 
wise acquire  all  or  any  part  of  the  business  and  assets  of  any  person,  firm, 
association  or  corporation  now  or  hereafter  engaged  in  a  business  similar 
to  that  proposed  to  be  carried  on  under  this  certificate  of  incorporation, 
and  in  the  purchase  of  any  such  business  or  assets  to  assume  any  and  all 
liabilities  that  may  be  then  existing  upon  any  such  business  or  assets  so 
purchased;  to  purchase  or  otherwise  acquire  mines  and  mining  lands; 
to  mine  any  and  all  metals,  to  engage  in  mining  in  all  its  branches,  and  to 
sell  or  dispose  of  the  products  of  such  mining;  to  engage  in  smelting  in  all 
its  branches;  to  purchase  or  otherwise  acquire  lumber  lands,  to  cut  and 
mill  lumber,  to  establish  and  operate  lumber  mills,  and  to  sell  and  dispose 
of  and  deal  in  lumber,  and  to  engage  in  the  lumber  business  in  all  its 
branches;  to  establish  and  operate  rolling  mills;  to  acquire  by  lease,  pur- 
chase or  otherwise  any  and  all  real  estate  necessary  and  convenient  for  the 
establishment  and  operation  of  rolling  mills;  to  acquire  by  lease,  purchase 
or  otherwise  any  and  all  real  estate  necessary  and  convenient  for  the  es- 
tablishment and  operation  of  rolling  mills,  and  to  operate  and  maintain 
the  same;  to  acquire  and  construct  railroads,  steamships  or  vessels;  to 
use,  operate  and  maintain  the  same. 


Form  46. 

ENGINEERING. 

To  design,  construct,  enlarge,  extend,  repair,  complete,  take  down  and 
remove,  or  otherwise  engage  in  any  work  upon  bridges,  piers,  docks, 
foundations,  mines,  shafts,  tunnels,  wells,  waterworks,  lighthouses,  build- 
ings, railroads,  canals  and  all  kinds  of  excavations  and  iron,  wood, 
masonry  and  earth  construction  in  all  parts  of  the  world,  and  to  make, 
execute  and  take  or  receive  any  contracts  or  assignment  of  contracts 
therefor  or  relating  thereto  or  connected  therewith,  and  to  receive  in  pay- 
ment therefor  cash  or  stock,  bonds  or  other  securities  of  any  corporation 
with  which  such  contracts  may  be  made,  and  any  and  all  other  property 
of  any  sort  whatsoever,  and  to  hold  or  sell  the  same,  and  to  subscribe  to 
the  capital  stock  or  bonds  of  any  such  corporation. 


Form  47. 

FLOUR. 

To  purchase  and  sell  grain  or  cereals  of  every  kind  and  to  manufacture, 
buy  and  sell  flour  and  other  food  articles  manufactured  from  grain  or 
cereals,  and  to  acquire  by  purchase,  lease  or  otherwise,  and  to  own,  sell, 
lease,  mortgage,  convey,  improve  and  operate  factories  and  elevators, 
buildings  and  manufactories  for  the  production  and  storage  of  all  kinds 


FORMS    AND    PRECEDENTS.  1 75 

of  goods  that  may  be  produced  from  or  in  conjunction  with  grain  or 
cereals  of  any  kind;  to  buy,  sell,  trade  and  deal  in  the  products  of  said 
manufactories  or  factories  and  in  said  grains  or  cereals  in  any  state  of  their 
product. 

Form  48. 

ELEVATORS. 

1.  To  manufacture,  erect,  build,  furnish,  equip,  construct,  repair,  main- 
tain, operate,  buy,  sell,  and  in  general  to  utilize  and  deal  in  and  deal  with 
elevators  and  all  kinds  of  hoisting  machinery,  including  the  acquisition 
by  purchase,  manufacture  or  otherwise  of  all  materials,  supplies,  ma- 
chinery and  other  articles  necessary  or  convenient  for  use  in  connection 
with  and  in  carrying  on  the  business  herein  mentioned  or  any  part  thereof. 

2.  To  manufacture,  purchase  or  otherwise  acquire,  hold,  own,  mort- 
gage, sell,  assign  and  transfer,  invest,  trade,  deal  in  and  deal  with  goods, 
wares  and  merchandise  and  property  of  every  class  and  description,  in- 
cluding any  and  all  kinds  of  engines,  dynamos,  generators,  pumps,  and 
any  and  all  kinds  of  machinery,  any  and  all  kinds  of  implements  or  articles 
of  manufacture,  and  any  and  all  kinds  of  mechanical  apparatus. 


Form  49. 

CEMENT. 


To  manufacture,  sell  and  deal  in  Portland  cement,  and  all  kinds  of  nat- 
ural and  other  cement,  lime,  limestone,  calcined  and  other  plasters  and 
artificial  stone,  and  to  erect,  or  acquire  by  purchase,  lease  or  otherwise, 
manufactories,  kilns  and  buildings;  to  establish  and  maintain  and  operate 
manufactories,  kilns,  warehouses,  agencies  and  depots  for  manufacturing 
and  storing  its  cement  and  other  products,  and  for  their  sale  and  distribu- 
tion, and  to  transport,  or  cause  the  same  to  be  transported,  as  articles  of 
commerce,  and  to  do  any  and  all  things  incidental  thereto  and  necessary 
and  proper  to  be  done  in  connection  with  the  business  of  trading  and 
manufacturing  as  aforesaid. 


Form  50. 

BICYCLES. 


The  objects  for  which  the  corporation  is  formed  are  as  follows,  to  wit: 
The  manufacturing  and  selling  of  bicycles  and  all  parts  and  accessories 
thereof,  and  the  carrying  on  of  any  trade  or  business  incident  thereto 
or  connected  therewith;  the  manufacturing  and  selling  of  automobile 
vehicles  and  electric  and  other  motors,  and  the  carrying  on  of  any  trade 
or  business  incident  thereto  or  connected  therewith;  the  carrying  on  of 
any  manufacturing  or  mercantile  business  lawful  in  the  place  where  such 
business  shall  be  carried  on. 


176  FORMS    AND    PRECEDENTS. 

Form  51. 

DRY  GOODS. 

The  business,  both  wholesale  and  retail,  of  general  dry  goods  merchants, 
drapers,  haberdashers,  milliners,  dressmakers,  tailors,  furriers,  lace-men, 
clothiers,  hosiers,  glovers  and  general  outfitters. 


Form  52. 

ADVERTISING. 

To  carry  on  a  general  advertising  business  in  all  its  branches  both  as 
principals  and  agents;  to  carry  on  the  business  of  printers,  stationers,  en- 
gravers, bookbinders,  designers,  dealers  in  paper  and  all  fancy  articles, 
booksellers,  publishers,  advertising  agents,  buyers  and  sellers  of  news- 
papers and  publications  of  all  kinds,  and  dealers  in  any  other  articles  or 
things  of  a  character  similar  or  analagous  to  the  foregoing  or  any  of  them, 
or  connected  therewith;  and  in  general  to  undertake  and  transact  all  kinds 
of  agency  business  which  an  individual  may  legally  undertake;  to  buy, 
sell  and  deal  in  tickets  for  theatres  and  all  other  places  of  amusement  or 
entertainment. 


Form  53. 

AUTOMOBILES. 

To  carry  on  the  business  of  truckmen,  draymen,  mechanical  engineers 
and  manufacturers  and  workers  and  dealers  in  motive  power,  and  any 
business  in  which  the  application  of  compressed  air,  liquid  air,  electricity, 
or  any  power,  like  or  otherwise,  is  or  may  be  useful  or  convenient,  or  any 
other  business  of  a  like  nature,  and  to  do  the  business  of  common  carriers, 
of  persons,  freight,  express  and  property  of  all  kinds,  and.  either  as 
principals  or  agents,  to  trade  and  deal  in,  and  deal  with  any  article 
belonging  to  any  such  business,  and  all  apparatus,  appliances,  and  things 
used  in  connection  therewith,  or  with  any  invention  or  patents:  to 
produce  and  accumulate  compressed  air,  liquid  air.  electricity  and 
electromotive  force,  or  other  agents,  similar  or  otherwise,  and  to  supply 
the  same  for  the  production,  transmission  or  use  of  power  for  any  and 
all  purposes  and  uses  as  may  be  thought  advisable,  and  to  manufacture, 
buy,  sell,  hire,  lease,  let  and  deal  in  air  compressors,  in  electrical  machines 
and  apparatus,  trucks  and  cars,  and  all  machinery  for  the  use  of  power  of 
all  kinds,  and  to  obtain,  accept  and  use  all  permits  and  all  franchises, 
municipal  or  otherwise,  to  acquire  and  carry  on  works,  buildings  and 
structures  of  all  kinds,  relating  to  any  business  of  the  company,  and  to 
enter  into  such  contracts  and  make  such  arrangements  as  maj'  be  neces- 
sary to  carry  out  the  same. 


FORMS    AND    PRECEDENTS.  177 

Form  54. 

ELECTRIC  RAILWAY  LIGHTING,  ETC. 
In   the  state  of  ,   to  generate,   accumulate,   distribute   and 

supply  electricity  for  light,  heat,  power  and  signalling  and  other  pur- 
poses; to  construct,  own  and  operate  lines  for  the  conveyance  of  electric 
current  for  telegraph,  telephone,  cable  and  other  purposes;  to  construct, 
own  and  operate  electric  telephone  exchanges;  to  manufacture  and  supply 
gas  for  fuel  and  illuminating  purposes;  to  light  cities,  towns,  villages, 
buildings  and  places  both  public  and  private,  by  gas  or  electricity;  to 
make,  own,  sell  or  lease  all  machines,  instruments,  apparatus  and  other 
equipments  necessary  for  the  generation,  distribution,  accumulation  and 
employment  of  gas  and  electricity  or  either  of  them  for  any  purposes;  and 
generally  to  manufacture,  use  and  sell  gas  and  electricity  or  either  of 
them  for  any  and  all  lawful  purposes;  to  construct  whatever  works  and 
do  whatever  may  be  necessary  for  the  utilization  and  disposition  of  the 
by-products  resulting  from  the  operation  of  such  works;  to  acquire,  own, 
manage  and  convey  real  estate,  mineral,  water,  timber  and  oil  properties 
and  rights  therein,  and  dealing  in  same,  manufactured  or  unmanufactured, 
and  to  carry  on  the  business  of  mining,  smelting  and  refining  and  coke 
manufacturing;  to  build,  own  and  operate  and  convey  reservoirs  and  sew- 
age, drainage,  sanitary,  water  and  all  other  public  or  private  works;  to 
acquire  lands  and  to  erect  buildings  and  machinery  necessary  for  the  crea- 
tion, transmission  and  utilization  of  power  of  any  kind;  in  the  state  of 
,  or  elsewhere,  to  build,  purchase  or  otherwise  acquire 
steamships  or  vessels  of  any  other  class;  to  establish  and  maintain  lines 
of  steamships  or  other  vessels  of  any  class,  and  to  enter  into  contracts  for 
the  carriage  of  passengers,  mail  and  goods,  to  and  from  and  in  the  state 
of  ,  either  by  its  own  vessels,  railways  and  conveyances  or 

on  the  vessels,  railways  and  conveyances  of  others;  to  construct,  acquire, 
improve,  develop,  operate  and  manage  steam,  electric  or  other  kinds  of 
railways  in  said  state,  wharves,  piers,  docks,  warehouses,  harbors,  canals, 
dams,  tunnels,  bridges,  viaducts,  subways  and  conduits,  pipe  lines  and 
other  buildings  or  works  capable  of  being  advantageously  used  in  the 
transportation  or  care  of  freight  or  passengers,  or  the  laying  of  cables. 
wires,  pipes,  etc.,  to  construct,  maintain  and  operate  pneumatic  tubes  and 
other  devices  for  the  transmission  and  delivery  of  mails  and  parcels;  to 
carry  on  the  business  of  railway  contractors,  shipowners,  engineers,  man- 
ufacturers of  locomotives,  cars  and  machinery;  to  construct,  own  and 
operate  steam  plants  for  heating,  furnishing  power  and  other  purposes:  to 
manufacture,  sell  and  distribute  ice  or  refrigeration. 


Form  55. 
FARM  PRODUCTS. 
To  produce,  purchase,  sell  and  deal  in  butter,  cheese,  eggs,  milk,  vege- 
tables, poultry  and  other  food,  farm  and  dairy  products,  and  the  various 
materials  entering  into  or  used  in  the  production  thereof. 


178  FORMS    AND    PRECEDENTS. 

Form  56. 

FARM  AND  DAIRY  PRODUCTS. 

To  manufacture,  sell  and  otherwise  deal  in  condensed,  preserved  and 
evaporated  milk  and  all  other  manufactured  forms  of  milk;  to  produce, 
purchase  and  sell  fresh  milk  and  all  the  products  of  milk;  to  manufacture, 
purchase  and  sell  all  food  products;  to  raise,  purchase  and  sell  all  garden, 
farm  and  dairy  products;  to  raise,  purchase,  sell  and  otherwise  deal  in 
cattle  and  all  other  live  stock;  to  manufacture,  lease,  purchase  and  sell 
all  machinery,  tools,  implements,  apparatus  and  all  other  articles  and  ap- 
pliances used  in  connection  with  all  or  any  of  the  purposes  aforesaid,  or 
with  selling  and  transporting  the  manufactured  and  other  products  of  the 
company;  and  to  do  any  and  all  things  connected  with,  or  incidental  to, 
the  carrying  on  such  business  or  any  branch  or  part  thereof. 


Form  57. 

LIGHTING  AND   HEATING. 

To  manufacture,  sell  and  lease  to  other  corporations  and  to  public  and 
private  consumers,  gas  and  oil  machines,  appliances  and  devices  of  all 
kinds  for  the  production,  supply  and  use  of  light,  heat  and  power,  and  al! 
goods,  wares,  merchandise,  property  and  substances  now  used  in  the  pro- 
duction thereof,  or  incidental  thereto,  or  that  hereafter  may  be  invented, 
discovered  or  become  known  therein,  and  to  manufacture,  contract  for, 
and  furnish  light,  heat  and  power  to  other  persons,  firms  and  corpora- 
tions, public  and  private. 

Form  58. 

SECURITY  AND  INVESTMENTS. 

To  purchase,  receive,  hold  and  own  bonds,  mortgages,  debentures,  notes, 
shares  of  capital  stock,  and  other  securities,  obligations,  contracts  and  evi- 
dences of  indebtedness  of  any  private,  public  or  municipal  corporation, 
or  of  the  government  of  the  United  States,  or  of  any  state,  territory  or 
colony  thereof,  or  of  any  foreign  state  or  country;  to  receive,  collect  and 
dispose  of  interest,  dividends  and  income  upon,  of  and  from  any  of  the 
bonds,  mortgages,  debentures,  notes,  shares  of  capital  stock,  securities, 
obligations,  contracts,  evidences  of  indebtedness  and  other  propertj'  held 
or  owned  by  it,  and  to  exercise  in  respect  of  all  such  bonds,  mortgages, 
debentures,  notes,  shares  of  capital  stock,  securities,  obligations,  contracts, 
evidences  of  indebtedness  and  other  property,  any  and  all  the  rights, 
powers  and  privileges  of  individual  owners  thereof;  to  do  any  and  all 
acts  and  things  tending  to  increase  the  value  of  the  property  at  any  time 
held  by  the  company;  to  issue  bonds  and  to  secure  the  same  by  pledges 
or  deeds  of  trust  or  mortgages  of  or  upon  the  whole  or  any  part  of  the 
property   held   by   the   company,   and   to   sell   or   pledge   such   bonds   for 


FORMS    AND    PRECEDENTS.  179 

proper  corporate  purposes,  as  and  when  the  board  of  directors  shall  de- 
termine; and,  in  the  promotion  of  its  said  corporate  business  of  invest- 
ment and  to  the  extent  authorized  by  law,  to  lease,  purchase,  hold,  sell, 
assign,  transfer,  pledge,  mortgage  and  convey  real  and  personal  property 
of  any  name  and  nature;  but  nothing  herein  is  to  be  construed  as  intended 
to  form  a  banking  company,  a  savings  bank  or  a  corporation  intended  as 
a  part  of  its  business  to  derive  profit  from  the  loan  and  use  of  money. 


Form  59, 

STREET  RAILWAY. 

To  engage  in  and  carry  on  the  business  of  manufacturing  street  railway 
cars,  railroad  cars,  automobiles,  omnibuses,  and  all  other  vehicles  for 
the  transportation  or  conveyance  of  passengers,  freight,  mail  or  express, 
and  of  manufacturing  car  trucks,  car  wheels,  equipment  and  rolling  stock; 
and  of  purchasing  and  otherwise  acquiring,  constructing,  equipping,  leas- 
ing, maintaining  and  operating,  by  electricity  or  other  power,  street  rail- 
ways for  the  transportation  of  passengers,  mail,  express,  merchandise  or 
other  freight,  in  any  state  or  territory  of  the  United  States,  or  in  any  for- 
eign country;  and  of  manufacturing,  generating,  storing,  using,  selling 
and  leasing  electricity  for  power,  light  or  heat,  or  other  purposes,  and 
for  the  purpose  of  acquiring  the  real  and  personal  property,  rights,  priv- 
ileges, ordinances  and  franchises  of  any  street  railway  companies,  and  of 
electric  power,  light  or  heat  companies,  foreign  or  domestic,  now  or  here- 
after existing,  or  of  leasing  the  same,  or  acquiring  and  holding  the  shares. 
bonds,  or  other  securities  of  such  railway  or  electric  power,  light  or  heat 
companies,  or  any  interest  therein;  buying,  selling  and  otherwise  traffick- 
ing and  dealing  in  any  of  the  same;  leasing,  buying  or  otherwise  acquiring, 
operating,  maintaining  and  letting,  selling  or  otherwise  disposing  of  lands, 
mills,  manufactories,  plants,  businesses,  good-will,  patents,  patent  rights, 
and  all  rights  and  privileges  in  connection  therewith,  and  other  property 
and  appurtenances  pertaining  to  said  business;  acquiring,  operating  and 
maintaining,  and  disposing  of  storage,  transportation  and  all  other  facili- 
ties and  conveniences  whatsoever  and  wheresoever  in  connection  with  any 
of  the  purposes  herein  referred  to;  acting  as  financial,  commercial  and 
genera]  agent  for  any  and  all  other  corporations  and  individuals,  whom- 
soever and  wheresoever,  in  the  conduct  of  its  or  their  business. 


Form  60. 

TELEGRAPH  AND  TELEPHONE  CONSTRUCTION  COMPANY. 

To  acquire  by  purchase,  or  to  construct  and  otherwise  deal  with  tele- 
graphs, telephones  and  all  other  electrical  or  other  contrivances  for  trans- 
mitting messages  by  signal,  works,  buildings,  conveniences;  to  acquire 
by  purchase  or  otherwise  any  lands,  or  interest  therein;  to  acquire,  carry 


l80  FORMS    AND    PRECEDENTS. 

on  and  deal  with  the  undertakings,  lands,  property,  and  businesses  of  tele- 
graph or  telephone  companies  and  of  companies  and  persons  engaged  in 
manufacturing,  constructing  and  laying  down  telegraph  or  telephone  lines, 
instruments,  machinery,  wire  and  other  materials  and  things  used  with  or 
appertaining  to  telegraphs  and  telephones. 


Form  61. 
COMMON  AND  PREFERRED  STOCK. 

The  total  amount  of  capital  stock  of  this  corporation  is  to  be 
dollars  ($  ),  divided  into 

(  )  shares  of  the  par  value  of  dollars 

(,$  )  each. 

Of  said  stock  shares  shall  be  preferred  stock,  and  the 

balance,  shares,  shall  be  common  or  general  stock. 

Said  preferred  stock  shall  entitle  the  holder  thereof  to  receive  out  of 
the  net  earnings,  and  the  company  shall  be  bound  to  pay  a  fixed  yearly 
(non)  cumulative  dividend  of  (not  exceeding  eight)  per  centum,  payable 
(semi)  annually  before  any  dividend  shall  be  set  apart  or  paid  on  the  com- 
mon stock.  Such  preferred  stock  shall,  at  the  discretion  of  the  company, 
be  subject  to  redemption  at  par  on  ,19,  or  on 

any  dividend  day  thereafter. 

The  holders  of  such  preferred  stock  may  choose  of  the 

directors,  and  the  remainder  of  the  board  shall  be  chosen  by  the  common 
or  general  stockholders. 

Such  preferred  stock  may  be  issued  as  and  when  the  board  of  directors 
shall  determine,  and  the  vote  or  assent  of  the  stockholders  shall  not  be 
necessary  for  such  issue. 

The  holders  of  preferred  stock  shall  in  case  of  liquidation  or  dissolu- 
tion of  the  company,  be  entitled  to  be  paid  in  full,  both  the  principal  of 
their  shares  and  the  accrued  dividends  charged  before  any  amount  shall 
be  paid  to  the  holders  of  the  general  or  common  stock. 


CL.\USES  REGULATING  BUSINESS.  CREATING  POWERS. 

ETC. 

The  certificate  of  incorporation  may  also  conuin  any  provision  which  the  incorporators  may 
choose  to  insert  for  the  regulation  of  the  business  and  for  the  conduct  of  the  affairs  of  the  corpora- 
tion, and  any  provision  creating,  defining,  limiting  and  regulating  the  powers  of  the  corporation, 
the  directors  and  the  stockholders,  or  any  classes  of  stockholders ;  Provided,  such  provisions  are 
not  contrary  to  the  laws  of  this  state.     The^e  clauses  may  be  greatly  varied.     (Section  8,  ante.) 

Form  62. 

DIRECTORS  TO  MAKE  BY-LAWS. 

The  board  of  directors  shall  have  power  without  the  assent  or  vote  of 
the  stockholders  to  make,  alter,  amend  and  rescind  the  by-laws  of  this 


FORMS    AND    PRECEDENTS.  l8l 

corporation,  to  fix  the  amount  to  be  reserved  as  working  capital,  to  au- 
thorize and  cause  to  be  executed  mortgages  and  Hens  upon  the  real  and 
personal  property  of  this  corporation. 


Form  63. 

DIRECTORS  TO  SELL  ALL  THE  PROPERTY. 
With  the  consent  in  writing  and   pursuant  to  the  vote  of  the  holders 
of  a  majority  of  the  stock  issued  and  outstanding,  the  directors  shall  have 
power  and  authority  to  sell,  assign,  transfer  or  otherwise  dispose  of  the 
whole  property  of  this  corporation. 


Form.  64. 

DIRECTORS  TO  REGULATE  EXAMINATION  OF  BOOKS. 

The  directors  shall  from  time  to  time  determine  whether  and  to  what 
extent,  and  at  what  times  and  places  and  under  what  conditions  and  regu- 
lations the  accounts  and  books  of  the  corporation,  or  any  of  them,  shall 
be  open  to  the  inspection  of  the  stockholders;  and  no  stockholder  shall 
have  any  right  of  inspecting  any  account  or  book  or  document  of  the  cor- 
poration, except  as  conferred  by  statute  or  authorized  by  the  directors,  or 
by  a  resolution  of  the  stockholders. 


Form  65. 

TO  APPLY  SURPLUS  EARNINGS. 

That  the  company  may  use  and  apply  its  surplus  earnings  or  accumu- 
lated profits,  authorized  by  law  to  be  reserved,  to  the  purchase  and  acqui- 
sition of  property,  and  to  the  purchase  and  acquisition  of  its  own  capital 
stock  from  time  to  time,  and  to  such  extent  and  in  such  manner  and  upon 
such  terms  as  its  board  of  directors  shall  determine,  and  neither  the 
property,  nor  the  capital  stock  so  purchased  and  acquired,  nor  any  of  its 
capital  stock  taken  in  payment  or  satisfaction  of  any  debt  due  to  the  com- 
pany, shall  be  regarded  as  profits  for  the  purpose  of  the  declaration  or 
payment  of  dividends,  unless  a  majority  of  the  board  of  directors  or  a 
majority  of  the  stockholders  shall  otherwise  determine. 


Form  66. 

TO  PRESCRIBE  THE  NUMBER  OF  DIRECTORS  FOR  A 
QUORUM. 

The  company  may  in  its  by-laws  prescribe  the  number  necessary  to 
constitute  a  quorum  of  the  board  of  directors,  which  number  may  be  less 
than  a  majority  of  the  whole  number. 


l82  FORMS    AND    PRECEDENTS. 

Form  67. 
DIRECTORS  TO  HOLD  AND  KEEP  BOOKS  OUT  OF  STATE. 
The  directors  may  hold  their  meetings,  and  have  an  office,  and  keep 
the  books  of  the  corporation  outside  of  this  state  (except  either  the  orig- 
inal or  duplicate  stock  and  transfer  books — which  must  be  kept  in  their 
principal  office  within  this  state). 


Form  68. 
CLASSIFICATION  OF  DIRECTORS. 
The  directors  shall  be  divided  as  equally  as  may  be  into  five  classes. 
The  seats  of  the  directors  of  the  first  class  shall  be  vacated  at  the  expira- 
tion of  the  first  year;  of  the  second  class,  at  the  expiration  of  the  second 
year;  of  the  third  class,  at  the  expiration  of  the  third  year;  of  the  fourth 
class,  at  the  expiration  of  the  fourth  year,  and  of  the  fifth  class,  at  the 
expiration  of  the  fifth  year,  so  that  one-fifth  may  be  chosen  every  year. 


Form  69. 

LIMITATION  ON  LIABILITY  OF  ORIGINAL  SUBSCRIBERS. 
The  subscribers  hereto,  and  each  other  subscriber  for  the  stock  of  the 
company,  shall  at  all  times  be  liable  for  the  purchase  price  of  the  stock 
for  which  he  subscribed  until  ten  per  cent,  of  the  par  value  thereof  has 
been  paid  thereon,  but  after  the  payment  of  said  ten  per  cent,  the  subscriber 
shall  no  longer  be  liable  for  any  unpaid  part  of  his  subscription  excepting 
upon  such  shares  as  shall  stand  of  record  on  the  books  of  the  company 
in  the  subscriber's  name  at  the  time  a  call  or  assessment  is  made:  but  the 
holders  of  such  shares  of  record  on  the  books  of  the  company,  and  they 
only,  shall  be  liable  for  the  same. 


Form  70. 

LIMITATION  ON  POWER  TO  CREATE  MORTGAGES. 
The  corporation  shall  not  issue  bonds  or  execute  any  mortgage  or  chat- 
tel mortgage  upon  its  property  or  franchises  without  the  consent  of  the 
stockholders  owning  at  least  ninety  per  cent,  of  the  preferred  stock  of  the 
corporation,  which  consent  shall  either  be  in  writing  and  be  filed  in  the 
office  of  the  corporation,  or  shall  be  given  by  a  vote  at  a  stockholders' 
meeting  called  for  the  purpose. 

Form  71. 
LIMITATION  ON  RIGHT  OF  STOCKHOLDERS  TO  EXAMINE 

BOOKS. 
No  stockholder  or  stockholders  holding  less  than  forty  per  cent,  of  the 
total  stock  issued  shall  be  entitled  to  an  examination  of  the  books  of  ac- 


FORMS    AND    PRECEDENTS.  183 

count  or  documents,  or  papers,  or  vouchers  of  this  company,  except  by 
a  resolution  of  the  board  of  directors  giving  such  privilege,  and  an  ex- 
amination shall  then  be  had  only  at  the  time  and  place,  in  the  manner, 
to  the  extent  and  by  the  person  named  in  such  resolution  of  the  board 
of  directors,  excepting  always  from  this  restriction  such  corporate  records 
as  are,  by  statute,  open  to  the  inspection  of  stockholders. 

This  restriction  shall  not  be  construed  to  limit  the  right  or  power  of  any 
director  or  ofificer  of  the  corporation  to  examine  the  books,  papers,  or 
vouchers  of  the  said  corporation. 


Form  72. 

DIRECTORS  AND  OFFICERS   NOT  SUBJECT  TO   REMOVAL. 

Neither  the  directors  nor  the  members  of  the  executive  committee  nor 
the  president  or  vice-president  shall  be  subject  to  removal  during  their 
respective  terms  of  ofifice,  by  the  stockholders  or  otherwise,  nor  shall  their 
terms  of  ofifice  be  diminished  during  their  tenure. 


Form  73. 


DIRECTORS    TO    SELL    PROPERTY    ON    REQUEST    OF    MA- 
JORITY OF  STOCKHOLDERS. 

The  directors  shall  at  any  time  sell  or  dispose  of  all  or  any  part  of  tlie 
real  estate,  personal  property  or  other  assets  of  any  kind  or  nature  that 
may  be  owned  by  the  company  on  the  request  of  a  majority  of  all  the 
stockholders,  preferred  and  common,  to  be  evidenced  by  a  vote  at  a 
meeting  called  on  two  weeks'  notice,  or  by  a  writing  under  the  signature 
of  a  majority  of  said  stockholders.  Said  sale  shall  be  made  for  cash  or 
in  exchange  for  other  property  as  may  be  directed  by  said  stockholders. 


Form  74. 

LIMITATION  ON   POWER  TO  CREATE  MORTGAGES. 

The  corporation  shall  not  have  power  to  mortgage  its  real  property  or 
any  part  thereof  nor  to  create  any  lien,  by  way  of  mortgage  or  other- 
wise, upon  its  plant  and  machinery  used  in  its  business  of  manufacturing, 
except  upon  the  assent  in  writing  first  obtained  of  the  holders  of  two- 
thirds  of  the  entire  capital  stock  issued  and  outstanding,  or  upon  the 
affirmative  vote  of  the  holders  of  a  majority  of  the  entire  capital  stock, 
issued  and  outstanding,  at  a  meeting  of  the  stockholders  duly  called  for 
that  purpose.  Upon  such  assent  so  obtained,  or  upon  such  affirmative 
vote  so  had,  and  not  otherwise,  the  directors  shall  have  power  to  mort- 
gage the  said  real  property,  plant  and  machinery  of  the  corporation,  or 
any  part  thereof,  to  secure  an  issue  of  bonds  or  otherwise. 


184  FORMS    AND    PRECEDENTS. 

Form  75. 

EXECUTIVE  COMMITTEE. 

The  board  of  directors,  by  resolution  passed  by  a  majority  of  the  whole 
board,  may  designate  three  directors  to  constitute  an  executive  committee, 
which  committee,  to  the  extent  provided  in  said  resolution  or  in  the  by- 
laws of  the  corporation,  shall  have,  and  may  exercise  the  power  of  the 
board  of  directors  in  the  management  of  the  business  and  affairs  of  the 
corporation,  and  shall  have  power  to  authorize  the  seal  of  the  corpora- 
tion to  be  afifixed  to  all  papers  which  may  require  it. 

THE  BY-LAWS. 

STATUTORY    MATTERS    TO    BE    PROVIDED    FOR    IN    THE    BY-LAWS. 
[The  references  are  to  sections  of  the  general  corporation  law,  ante.] 

(i)  The  number  of  directors  should  be  fixed,  but  not  less  than  three: 
Section  20. 

(2)  Provision  for  the  management  of  the  corporate  property:  Sec- 
tion 20. 

(3)  Provisions  for  the  regulation  and  government  of  the  affairs  of  the 
company:    Section  20. 

(4)  The  time  of  the  annual  election  should  be  fixed.  The  place  of  the 
election  is  the  principal  office  of  the  company  in  this  state,  unless  the  by- 
laws otherwise  provide:    Sections  20  and  136. 

(5)  Classification  of  directors:    Section  20. 

(6)  Provide  whether  officers  shall  be  elected  by  stockholders  or  direct- 
ors:  Section  21. 

(7)  Duties  of  president,  secretary  and  treasurer:    Section  21. 

(8)  Treasurer's  bond:    Section  21. 

(9)  Manner  of  election  or  appointment  and  tenure  of  other  officers, 
agents,  etc.:    Section  22. 

(10)  Filling  of  vacancies  among  directors  and  officers.  If  no  provision 
is  made  vacancies  are  filled  by  the  board  of  directors:    Sections  20  and  22. 

(11)  Manner  of  calling  and  conducting  meetings:    Section  25. 

(12)  Qualification  of  voters,  one  share  is  necessary  for  each  vote:  Sec- 
tion 20. 

(13)  Manner  of  transferring  stock  and  regulations  as  to  transfers:  Sec- 
tion 16. 

(14)  Number  of  shares  to  entitle  stockholders  to  one  vote:    Section  20. 

(15)  Qualification  of  directors:    Section  20. 

(16)  Establishment  of  office  outside  of  state,  and  keeping  books  out 
of  state:   Sections  6  and  17. 

No  form  of  by-laws  can  be  given  which  could  be  safely  followed  under  all  circumstances.  The 
by-laws  are  a  supplement  to  the  certificate  of  incorporation  and  should  follow  the  scheme  of  organi-^ 
zation  laid  out  therein. 

As  the  former  requires  the  services  of  skillful  counsel  so  the  latter  require  like  assistance,  and 
no  ready-made  form  of  by-lawi  could  be  presented  whick  are  valuable  for  general  use.  The  lec- 
tions pertaining  to  the  business  management  of  the  company  are  susceptible  of  change  to  meet  the 
requirements  in  each  particular  case. 


FORMS    AND    PRECEDENTS.  185 

Form  76. 

BY-LAWS. 
title;  location;  corporate  seal. 
I.  The  title  of  the  corporation  is  The  Company. 

1.  The  principal  office  shall  be  in  ,  Delaware. 

3.  The  corporate  seal  of  the  company  shall  have  inscribed  thereon  the 
name  of  the  corporation  and  the  year  of  its  creation  (189    .). 


directors. 

4.  The  property  and  business  of  the  corporation  shall  be  managed  by 
a  board  of  directors,  who  shall  at  all  times  be  stockholders,  they 

shall  hold  office  for  one  year  and  until  others  are  elected  and  qualified  in 
their  stead. 

If  the  office  of  any  director  becomes  vacant,  by  reason  of  death,  resig- 
nation or  disqualification,  the  remaining  directors,  by  a  majority  vote, 
may  elect  a  successor,  who  shall  hold  office  for  the  unexpired  term. 


meetings  of  stockholders. 

5.  The  annual  meeting  of  stockholders  shall  be  held  on  the 

day    of  in    each    year,    at    the    principal    office    of    the    com- 

pany in  ,  at  eleven  o'clock  a.  m.,  when  they  shall  elect,  by  a 

plurality  vote,  by  ballot,  nine  directors  to  serve  for  one  year  and  until 
their  successors  are  elected  or  chosen  and  qualified,  each  stockholder 
being  entitled  to  one  vote,  in  person  or  by  proxy,  for  each  share  of  stock 
standing  registered  in  his  name  on  the  day  in  preceding 

the  election. 

A  majority  in  amount  of  the  stock  outstanding  shall  be  requisite  to 
constitute  a  quorum  for  an  election  of  directors  or  the  transaction  of 
other  business. 

The  polls  for  such  election  shall  be  opened  at  twelve  o'clock  noon  and 
closed  at  one  o'clock  in  the  afternoon. 

Notice  of  the  annual  meeting  shall  be  published  in  a  newspaper  in  the 
city  of  once  each  week  during  the  month  of  next 

preceding  the  meeting. 

Special  meetings  of  stockholders  shall  be  called  by  the  secretary  by 
mailing  a  notice,  at  least  five  days  prior  to  the  date  of  meeting,  to  each 
stockholder  of  record  at  his  last  known  post-office,  on  the  request  in  writ- 
ing or  by  vote  of  a  majority  of  the  board  of  directors,  or  on  demand  in 
writing  by  stockholders  of  record,  owning  a  majority  in  amount  of  the 
entire  capital  stock  of  the  company. 

meetings  of  directors. 

6.  Regular  meetings  of  the  directors  shall  be  held  monthly  at  the  office 
of  the  company  in  ,  or,  by  order  of  the  directors,  elsewhere,  on 
a  day  and  at  an  hour  to  be  fixed  by  the  board. 


l86  FORMS    AND    PRECEDENTS. 

Notice  of  such  meeting  shall  be  mailed  to  each  director  by  the  secretary 
at  least  three  days  previously. 

A  majority  of  the  directors  in  ofifice  shall  be  necessary  to  constitute  a 
quorum  for  the  transaction  of  business. 

Special  meetings  of  the  board  may  be  called  by  the  president,  on  one 
day's  notice  to  each  director;  special  meetings  shall  be  called  in  like  man- 
ner on  the  written  request  of  members  of  the  board. 


POWER    OF    DIRECTORS. 

/.  The  board  of  directors  shall  have  power  to  elect  or  appoint  all  neces- 
sary of^cers  and  committees;  to  employ  agents,  factors,  clerks  and  work- 
men; to  fix  their  compensation;  to  prescribe  their  duties;  to  dismiss  any 
appointed  officer  or  employe  without  previous  notice,  and  generally  to 
control  all  the  affairs  of  the  company. 


LOMPENSATION    OF    DIRECTORS. 

8.  Directors,  as  such,  shall  not  receive  any  stated  salary  for  their  serv- 
ices, but  by  resolution  of  the  board  may  be  allowed  ten  dollars  for  at- 
tendance at  each  regular  or  special  meeting  of  the  board,  if  present  at 
roll-call  and  until  adjournment,  unless  excused. 

Members  of  either  standing  or  special  committees  may  be  allowed  like 
compensation  for  attending  committee  meetings. 

Additional  compensation  may  be  made  to  directors  for  special  services 
rendered. 


ORDER   OF   BUSINESS. 

9.  The  order  of  business  at  the  meetings  of  the  board  shall  be  as  fol- 
lows: 

(1)  A  quorum  being  present,  the  president  shall  call  the  board  to  order. 

(2)  The  minutes  of  the  last  meeting  shall  be  read,  and  considered  as  ap- 
proved, if  there  be  no  amendments. 

(3)  Reports  of  officers  of  the  company. 

(4)  Reports  of  committees. 

(5)  Unfinished  business. 

(6)  Miscellaneous  business. 

(7)  New  business. 

OFFICERS   OF   THE   COMPANY. 

10.  The  officers  of  the  company  shall  consist  of  a  president,  vice-presi- 
dent, treasurer,  secretary,  counsel,  and  such  other  officers  as  may  from 
time  to  time  be  elected  or  appointed  by  the  board  of  directors. 

One  person  may  hold  the  offices  of  secretary  and  treasurer. 


FORMS    AND    PRECEDENTS.  I07 

OFFICERS,    HOW    CHOSEN. 

11.  The  directors,  by  a  majority  ballot,  shall  elect  a  president  and  vice- 
president  from  among  their  own  number,  and  shall  also  appoint  a  secre- 
tary, treasurer,  counsel,  and  such  other  officers  as  they  may  deem  neces- 
sary. 

DUTIES   OF  THE  PRESIDENT. 

12.  It  shall  be  the  duty  of  the  president  to  preside  at  all  meetings  of 
the  board  of  directors,  to  preserve  order  and  to  promote  the  prompt  and 
efficient  dispatch  of  business;  to  see  that  all  orders  and  resolutions  of  the 
board  are  carried  into  efifect;  to  execute  all  contracts  and  agreements 
authorized  by  the  board;  to  sign  all  certificates  of  stock;  to  keep  in  safe 
custody  the  seal  of  the  company,  and,  when  authorized  by  the  board,  to 
affix  the  same  to  any  instrument  requiring  the  same,  which  seal  shall 
always  be  attested  by  the  signature  of  the  president  and  of  the  secretary 
or  the  treasurer. 

He  shall  have  the  general  superintendence  and  direction  of  all  the  other 
officers  of  the  company,  and  shall  see  that  their  duties  are  properly  per- 
formed. 

He  shall  submit  a  complete  report  of  the  operations  of  the  company 
for  the  year,  and  the  state  of  its  afifairs  on  the  31st  day  of  December,  to 
the  directors  at  their  regular  meeting  in  January,  and  to  the  stockholders 
at  their  annual  meeting  in  of  each  year,  and  from  time  to  time 

shall  report  to  the  directors  all  matters  within  his  knowledge  which  the 
interests  of  the  company  may  require  to  be  brought  to  their  notice. 

He  shall  be  ex-officio  a  member  of  all  standing  committees,  and  shall 
have  the  general  powers  and  duties  of  supervision  and  management  usu- 
ally vested  in  the  office  of  president  of  a  corporation. 

THE    VICE-PRESIDENT. 

13.  The  vice-president  shall  be  vested  with  all  the  powers,  and  required 
to  perform  all  the  duties  of  the  president  in  his  absence. 


PRESIDENT    PRO    TEM. 

14.  In  the  absence  of  the  president  and  vice-president  the  board  may 
appoint  a  president  pro  tern. 

THE  SECRETARY. 

15.  The  secretary  shall  be  ex-officio  secretary  of  the  board  of  directors 
and  of  the  standing  committees;  he  shall  attend  all  sessions  of  the  board; 
shall  act  as  clerk  thereof,  and  record  all  votes  and  the  minutes  of  all  pro- 
ceedings in  a  book  to  be  kept  for  that  purpose. 

He  shall  perform  like  duties  for  the  standing  committees  when  re- 
quired. 


l88  FORMS    AND    PRECEDENTS. 

He  shall  give  notice  of  all  calls  for  instalments  to  be  paid  by  the  stock- 
holders, and  shall  see  that  proper  notice  is  given  of  all  meetings  of  stock- 
holders of  the  company  and  of  the  board  of  directors. 

He  shall  be  sworn  to  the  faithful  discharge  of  his  duty,  and  shall  give 
such  bond  as  may  be  required  by  the  board  of  directors. 


THE   TREASURER. 

i6.  The  treasurer  shall  keep  full  and  accurate  accounts  of  receipts  and 
disbursements  in  books  belonging  to  the  company,  and  shall  deposit  all 
moneys  and  other  valuable  effects  in  the  name  and  to  the  credit  of  the 
company,  in  such  depositories  as  may  be  designated  by  the  board  of 
directors. 

He  shall  disburse  the  funds  of  the  company  as  may  be  ordered  by  the 
board,  taking  proper  vouchers  for  such  disbursements,  and  shall  render 
to  the  president  and  directors,  at  the  regular  monthly  meetings  of  the 
board,  or  whenever  they  may  require  it,  an  account  of  all  his  transactions 
as  treasurer  and  of  the  financial  condition  of  the  company,  and  at  the 
regular  meeting  of  the  board  in  January  annually  a  like  report  for  the 
preceding  year. 

He  shall  give  the  company  a  bond  in  a  sum,  and  with  security,  satis- 
factory to  the  board,  for  the  faithful  performance  of  the  duties  of  his 
otifice,  and  the  restoration  to  the  company,  in  case  of  his  death,  resigna- 
tion or  removal  from  office,  of  all  books,  papers,  vouchers,  money  or  other 
property  of  whatever  kind  in  his  possession  belonging  to  the  corporation. 

The  certificates  of  stock,  when  signed  by  the  president,  shall  be  counter- 
signed by  him. 

THE    COUNSEL. 

i~.  The  counsel  shall  be  the  legal  adviser  of  the  company  and  shall  re- 
ceive a  stated  salary  for  his  services  as  such. 


DUTIES    OF    OFFICERS    MAY    BE    DELEGATED. 

i8.  In  case  of  the  absence  of  any  officer  of  the  company  the  board  of 
directors  may  delegate  his  powers  and  duties  to  any  other  officer,  or  to 
any  director,  for  the  time  being. 


STAXDIN'G    COMMITTEES. 

19.  There  shall  be  an  executive  committee  of  directors, 

appointed  by  the  board,  who  shall  meet  at  regular  periods,  or  on  notice 
to  all  by  any  of  their  own  number:  they  shall  advise  with  and  aid  the- 
officers  of  the  company  in  all  matters  concerning  its  interests  and  the 
management  of  its  business,  and  generally  perform  such  duties  and  exer- 
cise such  powers  as  may  be  directed  or  delegated  by  the  board  of  directors, 


FORMS    AND    PRECEDENTS.  1 89 

from  time  to  time,  and  they  shall  have  authority  to  exercise  all  the  powers 
of  the  board  at  any  time  a  quorum  may  fail  to  attend  any  regular  or 
special  meeting  thereof. 

20.  There  shall  be  a  finance  committee  of  directors,  appointed 
by  the  board,  who  shall  attend  to  and  supervise  all  the  fiscal  operations 
of  the  company,  under  the  direction  of  the  board,  and  shall  examine  and 
audit  all  accounts  of  the  company  at  the  close  of  each  fiscal  year,  and  at 
such  other  times  as  they  may  deem  necessary. 

21.  The  standing  committees  shall  keep  regular  minutes  of  their  trans- 
actions and  cause  them  to  be  recorded  in  a  book  kept  in  the  office  of  the 
company  for  that  purpose,  and  report  the  same  to  the  board  of  director? 
at  their  regular  meetings. 


TRANSFER   OF    STOCK. 


22.  All  transfers  of  the  stock  of  the  corporation  shall  be  made  upon 
the  books  of  the  company  by  the  holder  of  the  shares  in  person  or  by  his 
legal  representative;  but  no  transfer  of  stock  shall  be  made  within  ten 
days  next  preceding  the  day  appointed  for  paying  a  dividend. 


CERTIFICATES   TO   BE  CANCELED. 


2^.  Certificates  of  stock  surrendered  shall  be  canceled  by  the  president 
or  treasurer  at  the  time  of  transfer. 


LOSS    OF    CERTIFICATE. 

24.  Any  person  claiming  a  certificate  or  evidence  of  stock  to  be  issued 
in  place  of  one  lost  or  destroyed,  shall  make  an  af^davit  or  affirmation 
of  that  fact,  and  advertise  the  same  in  such  newspaper,  and  for  such 
space  of  time  as  the  board  of  directors  may  require,  describing  the  cer- 
tificate; and  shall  furnish  the  company  with  proof  of  publication  by  the 
affidavit  of  the  publisher  of  the  newspaper,  and  shall  give  the  board  a 
bond  of  indemnity,  with  one  or  more  securities,  if  required,  in  double  the 
par  value  of  such  certificate,  against  any  damage  that  may  arise  from 
issuing  a  new  certificate,  whereupon  the  president  and  treasurer  may, 
one  month  after  the  termination  of  the  advertisement,  issue  a  new  certifi- 
cate, of  the  same  tenor  with  the  one  alleged  to  be  lost  or  destroyed,  but 
always  subject  to  the  approval  of  the  board  of  directors. 


CONTRACTS  AND  AGREEMENT.S. 


25,  No  agreement,  contract  or  obligation,  other  than  a  check,  involving 
the  payment  of  money  or  the  credit  of  the  company  for  more  than  one 
thousand  dollars,  shall  be  made  without  the  order  of  the  board  of  directors 
or  of  the  executive  committee. 


190  FORMS    AND    PRECEDENTS. 

CHECKS   FOR   MONEY. 

26.  All  checks,  drafts  or  orders  for  the  payment  of  money  shall  be 
signed  by  the  treasurer  and  countersigned  by  either  the  president  or 
vice-president. 

No  check  shall  be  signed  by  both  the  treasurer  and  president,  or  the 
vice-president,  in  blank. 

BOOKS   AND   ACCOUNTS. 

i"].  The  books,  accounts  and  records  of  the  company  shall  be  open  to 
inspection  by  any  member  of  the  board  of  directors  at  all  times. 


ALTERATION    OF    BY-LAWS. 

28.  The  board  of  directors,  by  a  vote  of  six  members,  may  alter  or 
amend  these  by-laws,  but  no  alteration  shall  be  made  unless  proposed  at 
a  regular  meeting  of  the  board  and  considered  at  a  subsequent  regular 
meeting. 

ORGANIZATION  MEETINGS. 

FIRST    MEETING    OF    INCORPORATORS. 

Immediately  after  the  filing  of  the  certificate  of  incorporation  with  the 
secretary  of  state,  a  meeting  of  the  stockholders  should  be  held  at  the 
principal  ofifice  in  Delaware  and  the  preliminary  formal  organization  of 
the  company  efifected. 

The  common  practice  is  for  the  incorporators  to  sign  a  written  waiver 
of  notice  fixing  the  time  and  place  of  the  meeting:    Form  gi. 

The  certificate  of  incorporation  should  be  presented,  and  it  is  usual  to 
enter  it  at  length  in  the  minutes. 

The  by-laws  should  be  adopted  section  by  section,  and  these  should 
also  be  entered  at  length  upon  the  minutes:    Form  76. 

A  resolution  should  be  passed  by  two-thirds  in  interest  of  the  stock- 
holders authorizing  and  directing  the  directors  to  assess  upon  each  share 
of  stock  not  fully  paid  up  the  balance  remaining  unpaid  on  said  stock 
up  to  the  par  value  thereof,  such  assessments  to  be  paid  to  the  treasurer 
at  such  times  and  by  such  instalments  as  the  directors  may  prescribe. 

The  principal  office  should  be  fixed  upon,  and  authority  granted  to  the 
agent  in  charge  thereof  to  keep  the  original  or  duplicate  stock  and  trans- 
fer books,  to  show  them  to  those  having  the  right  to  see  them,  to  keep  the 
name  of  the  company  at  all  times  publicly  displayed,  and,  in  all  respects, 
to  comply  with  the  laws  of  Delaware  in  this  respect. 

It  is  important  that  this  resolution  should  be  in  full  form,  granting  thi? 
authority:    Form  90. 

It  is  usual  to  designate  some  trust  company  as  the  agent  of  the  com- 
pany for  this  purpose  and  to  direct  that  the  stock  certificates  be  counter- 
signed by  such  company  as  transfer  agent. 

In  case  the  company  is  formed  for  the  purpose  of  taking  over  an  ex- 
isting business,  an  agreement  should  be  passed  upon  by  the  stockholders. 


FORMS    AND    PRECEDENTS.  IQl 

and  the  directors  should  be  authorized  to  have  it  executed,  and  to  take 
over  the  property  and  pay  for  it  in  stock  of  the  company,  or  partly  in 
stock  and  partly  in  cash  or  obligations  of  the  company,  as  the  circum- 
stances of  each  case  require. 

It  is  wise  at  this  point  to  authorize  an  increase  of  stock  from  the 
amount  named  in  the  certificate  of  incorporation  as  the  amount  with 
which  the  company  will  begin  business,  to  the  amount  authorized  by  the 
charter  as  the  total  amount  of  capital.  This  can  be  done  by  resolution  at 
this  time  and  avoid  the  necessity  of  calling  another  stockholders'  meeting, 
leaving  it  within  the  power  of  the  directors,  at  their  option,  to  issue  the 
remainder  of  the  stock. 

The  seal  of  the  company  should  be  adopted  and  the  form  of  the  stock 
certificate  should  also  be  passed  upon  and  approved  and  entered  at  length 
in  the  minutes:    Form  8i. 

There  is  no  necessity  for  any  fixed  number  of  stockholders  to  be  present 
at  this  meeting  in  person;  indeed,  it  is  perfectly  legal  if  the  stockholders 
should  attend  entirely  by  proxy,  provided  the  proxy  be  in  due  form. 


FIRST   MEETING   OF  DIRECTORS. 

The  meeting  of  the  directors  need  not  be  held  in  Delaware;  it  may  be 
held  at  any  place  fixed  upon  and  agreed  to  by  the  directors,  as  evidenced 
by  a  waiver  signed  by  them  all,  fixing  the  time,  place  and  object  of  the 
meeting:    Form  94. 

The  minutes  of  the  stockholders  should  be  read  and  recommendations, 
if  any,  acted  upon. 

The  board  should  elect  the  officers  of  the  company. 

The  oath  should  be  administered  to  the  secretary:    Form  95. 

The  treasurer  should  give  a  bond,  the  form,  the  amount  and  the  sureties 
or  surety,  being  passed  upon  and  accepted  by  the  board:    Form  96. 

If  the  by-laws  provide  for  an  executive  committee  it  should  be  ap- 
pointed and  the  chairman  announced. 

The  secretary  should  be  given  authority  to  procure  the  corporate  books. 

A  resolution  should  be  placed  upon  the  record  in  the  form  required 
by  the  bank  with  which  the  company  is  to  deposit,  authorizing  the  treas- 
urer to  open  a  bank  account  with  the  bank  and  clearly  designating  the 
manner  in  which  checks  and  drafts  should  be  signed,  whether  by  one 
ofificer  or  more,  and  what  should  be  the  endorsement  for  deposit. 

The  directors  should  also  pass  a  resolution  with  regard  to  the  office  of 
the  company  outside  of  the  state  of  Delaware,  and,  if  desired,  should  au- 
thorize meetings  of  the  board  to  be  held  at  the  office  out  of  the  state. 

A  formal  resolution  is  usual  directing  the  officers  in  accordance  with 
the  resolution  of  the  stockholders  to  call  for  the  assessment  of  stock,  and 
also  directing  the  proper  officers  of  the  company  to  purchase  the  property 
specified  in  the  minutes  of  the  stockholders'  meeting  and  to  issue  stock 
therefor,  or  for  labor  done. 

Care   should  be  taken  in   this   resolution   to   recite   that  the   directors 


192  FORMS    AND    PRECEDENTS. 

have  passed  upon  the  value  of  the  property  and  labor  done,  and  that  in 
their  judgment  it  is  of  the  value  placed  upon  it  and  for  which  the  stock  is 
to  be  issued. 

If  the  stockholders  have  passed  a  resolution  authorizing  the  directors 
to  increase  the  stock  beyond  the  amount  named  in  the  charter  as  the 
amount  with  which  the  company  will  begin  business,  a  resolution  effectu- 
ating that  increase  may  be  passed. 

If  it  is  desired  for  the  corporation  to  do  business  outside  of  the  state 
of  Delaware  and  in  any  state  requiring  a  certificate  to  be  filed,  then 
authority  should  be  given  to  the  proper  officers  to  execute  such  certificate 
in  conformity  with  the  laws  of  the  particular  state  in  question. 

Finally,  a  direction  should  be  placed  upon  the  record,  that  the  secre- 
tary forthwith  file  in  the  office  of  the  secretary  of  state  the  statement  re- 
quired by  section  4  of  "An  act  to  raise  revenue,"  signed  by  the  president 
and  secretary  or  treasurer,  giving  the  address  of  the  registered  office  in 
this  state,  the  name  of  the  agent  therein  and  in  charge  thereof,  and  upon 
whom  process  against  the  company  may  be  served,  and  the  names  of  the 
resident  director  and  other  matters  required  by  statute:  Form  105. 

These  are  the  formal  provisions,  and  any  further  or  other  provisions  or 
special  matters  should  be  inserted  at  length.  Any  bills  which  have  been 
paid  or  are  to  be  paid  should  be  passed  upon  and  audited. 

If  the  company  is  organized  for  the  purpose  of  taking  over  an  exist- 
ing business  and  has  been  formed  as  above  stated,  it  is  usual  to  send  out 
a  circular  informing  the  customers,  and  sometimes  a  notice  is  published 
in  the  newspapers  mentioning  the  change  of  the  firm  into  a  corporation, 
with  a  statement  that  all  of  the  shares  are  taken  up  by  the  co-partners,  in 
accordance  with  the  facts. 


Form  77. 

FIRST  MEETING  OF  INCORPORATORS. 

At  a  meeting  of  the  incorporators  of  the 
Company,  held  at  the  office  of  ,  No. 

street,  Wilmington,  Delaware  (designated  in  the  certificate  of  incorpora- 
tion as  the  location  of  the  principal  and  registered  office  of  the  company), 
on   the  day   of  ,    189     ,   at  o'clock   in 

the  noon,  pursuant  to  a  written  waiver  of  notice  signed  by  all 

of  the  incorporators  fixing  the  time  and  place  aforesaid,  the  following 
proceedings  were  had: 

The  following  incorporators  were  present  in  person: 

Name.  Number  of  Shares. 

The  following  incorporators  were  present  by  proxy: 

Name.  Name  of  Proxy.  Number  of  Shares. 

On  motion  Mr.  was  elected  chairman,  and  ^Nlr. 

was  appointed  secretary  of  the  meeting. 

I.  The  chairman  reported  that   the   certificate   of  incorporation   of  the 
company   was   recorded   in   the   recorder   of   deeds'    office   of  the   county 


FORMS    AND    PRECEDENTS.  1 93 

of  ,  on  the  day  of  ,  in  Certificate  of  In- 

corporation Record,  Vol.  ,  page        ,  etc.,  and  was  filed  on  the 

day  of  .   I         ,  in  the  ofifice  of  the  secretary  of  state,   and  pre- 

sented a  certified  copy  of  said  certificate  of  incorporation. 

2.  The  secretary  presented  and  read  the  waiver  of  notice  of  the  meeting. 

3.  The  proxies  above  mentioned  were  presented  and  ordered  to  be  filed. 

4.  The  secretary  presented  a  form  of  by-laws  for  the  regulation  of  the 
affairs  of  the  company,  which  were  read  article  by  article  and  unanimously 
adopted. 

5.  Messrs.  were  appointed 
inspectors  of  election,  and  the  oath  was  duly  administered  to  them. 

6.  The  inspectors  having  duly  qualified,  the  polls  were  opened  and  re- 
mained open  until  all  of  the  incorporators  had  voted.  The  polls  there- 
upon being  closed  the  vote  was  canvassed  and  the  inspectors  reported 
that  the  ballot  showed  that  the  following-named  persons  were  unani- 
mously elected  directors,  votes,  representing  shares  having 
been  cast  for  each  of  said  persons,  viz.: 

(Insert  names  of  directors  elected.) 

7.  Upon  motion,  duly  made  and  seconded,  and  by  the  affirmative  vote 
of  all  present,  it  was 

Ordered  (i).  That  in  compliance  with  the  laws  of  the  state  of  Dela- 
ware, this  corporation  have  and  continuously  maintain  a  principal  office 
and  place  of  business  within  the  state  of  Delaware,  and  have  an  agent 
at  all  times  in  charge  thereof,  and  upon  which  agent  process  against  this 
corporation  may  be  served,  and  therein  keep  the  stock  and  transfer  books 
for  the  inspection  of  all  who  are  authorized  to  see  the  same  and  for  the 
transfer  of  stock.  That  the  books  in  which  the  transfer  of  stock  shall 
be  registered  and  the  books  containing  the  names  of  the  shareholders  shall 
be  at  all  times  during  the  usual  hours  of  business  open  to  the  examination 
of  every  stockholder  at  said  principal  office. 

That  the  name  of  this  corporation  be  at  all  times  conspicuously  dis- 
played at  the  entrance  of  its  principal  office  in  this  state. 

And  be  it  further  ordered,  until  this  resolution  be  duly  rescinded, 

(2)  That  such  office  and  place  of  business  be  in  and  at  the  office  of 
the  Trust  Company,  Wilmington,  Delaware,  and  tliat 
this  company  be  registered  with  the  said  Trust  Company. 

(3)  That  Trust  Company  being  by  its  charter 
expressly  authorized  to  act  in  Delaware  as  the  agent  of  corporations, 
domestic  and  foreign,  to  the  same  extent  as  a  natural  person,  a  resident 
of  the  state  of  Delaware,  be  and  hereby  is  appointed  the  agent  of  this  cor- 
poration for  all  of  the  aforesaid  purposes  and  the  agent  of  this  company 
upon  whom  legal  process  against  this  corporation  may  be  served  within 
the  state  of  Delaware,  and  also  the  transfer  agent  of  the  stock  of  this 
company. 

8.  The  secretary  was  ordered  to  send  a  copy  of  the  foregoing  resolution, 
duly  certified  by  him  under  the  corporate  seal,  to  the 

Trust  Company. 
13 


194  FORMS    AND    PRECEDENTS. 

g.  Upon  motion,  duly  made  and  seconded,  and  by  the  affirmative  vote  of 
all  present,  the  following  preambles  and  resolutions  were  adopted: 

Whereas,  ha      presented  a  proposed  con- 

tract for  the  acquirement  by  this  company  of  certain  property  and  rights, 
and  the  procurement  of  certain  services  and  labor  (insert  a  sufficient  de- 
scription of  the  property  and  rights  to  properly  disclose  the  character 
thereof,  and  the  character  and  nature  of  the  services  and  labor),  in  con- 
sideration of  the  issue  of  stock  of  this  company  to  the  amount  of 
dollars  ($  ),  par  value;  and 

Whereas,  it  appears  to  the  stockholders  that  such  property  rights  and 
services  are  necessary  for  the  business  of  this  company  and  that  the  same 
is  of  the  value  of  dollars; 

Resolved,  That  the  board  of  directors  of  this  company  be,  and  they  are 
hereby  authorized  and  directed  to  enter  into  such  contract  for  the  pur- 
chase of  such  property  rights  and  the  engaging  and  employment  of  the 
services  above  mentioned  for  the  said  price,  and  to  issue  said  stock  in 
payment  thereof:  Provided,  that,  in  the  judgment  of  the  board  of  direct- 
ors, the  said  property,  rights  and  services  are  of  the  value  above  stated. 

10.  The  secretary  presented  and  read  a  waiver  of  notice  of  assessment 
and  of  the  time  and  place  of  payment  thereof,  signed  by  all  the  incorpo- 
rators. 

11.  The  board  of  directors  were  authorized  to  assess  the  stock  sub- 
scribed by  the  said  incorporators  one  hundred  per  cent.,  payable  as  and 
when  called  for  by  the  board  of  directors,  in  accordance  with  the  terms 
of  the  waiver. 

12.  Upon  motion,  duly  made  and  seconded,  and  by  the  affirmative  vote 
of  all  present  the  following  preamble  and  resolution  were  adopted: 

Whereas,  it  has  been  agreed  between  each  of  the  incorporators  and 
that  the  stock  to  be  issued  in  payment  of  the  prop- 
erty authorized  to  be  purchased  and  the  procurement  of  certain  services 
and  labor  by  the  resolution  set  forth  above,  shall  include  the  stock  sub- 
scribed by  the  incorporators,  as  evidenced  by  the  certificate  of  incor- 
poration. 

[NoTB. — The  last  clause  is  unnecessary  if  the  amount  with  which  the  company  begins  business 
is  paid  in  in  cash,  or  is  not  Included  in  the  stock  to  be  issued  for  the  property  or  labor  in  question.] 

Resolved,  That  the  board  of  directors  be  and  they  hereby  are  author- 
ized and  directed  to  accept  said  property  and  said  services  and  labor  as 
full  payment  of  the  subscriptions  for  stock  of  the  incorporators,  and  to 
issue  full  paid  stock  to  the  incorporators,  or  their  assigns,  to  the  amount 
of  their  respective  subscriptions. 

13.  Upon  motion,  duly  made  and  seconded,  and  by  the  affirmative  vote 
of  all  present,  it  was 

Resolved,  That  the  board  of  directors  be  and  they  hereby  are  authorized 

to    issue    capital    stock    of    this    company    to    the    aggregate    amount    of 

dollars,   in   such   amounts   and   proportions   as   from 

time  to  time  shall  be  determined  by  the  board  and  as  may  be  permitted 

by  law,  and  to  accept  in  full  or  partial  payment  of  such  stock  such  prop- 


FORMS    AND    PRECEDENTS.  195 

erty  and  procure  the  performance  of  such  services  and  labor  as  the  board 
may  determine  shall  be  necessary  for  the  business  of  the  company. 

14.  Upon  motion,  duly  made  and  seconded,  and  by  the  affirmative  vote 
of  all  present,  it  was 

Resolved,  That  the  seal,  an  impression  of  which  is  herewith  affixed,  be 
adopted  as  the  corporate  seal  of  the  company. 

15.  A  form  of  stock  certificate  was  presented  and  upon   motion  duly 
made  and  seconded,  was  adopted: 

16.  Resolved,  That  a  copy  of  each  of  the  following  papers  be  inserted  in 
the  minute  book  for  the  purpose  of  reference: 

(i)  Certified  copy  of  certificate  of  incorporation.     (Found  at  p.        .) 

(2)  By-Laws.     (Found  at  p.         .) 

(3)  Waiver  of  notice  of  this  meeting.     (Found  at  p.        .) 

(4)  Waiver  of  notice  of  assessment.     (Found  at  p.         .) 

(5)  Waiver  of  notice  of  increase  of  capital  stock.     (Found  at  p.        .) 

(6)  Certificate  of  inspectors  of  election.     (Found  at  p.        .) 

(7)  Form  of  proxy  used  in  the  meeting.     (Found  at  p.         .) 

(8)  Form  of  stock  certificate.     (Found  at  p.         .) 
The  meeting  thereupon  adjourned. 

Secretary  pro  tern. 

It  it  not  necessarily  required  that  inipectors  be  appointed  and  sworn  to  conduct  an  election 
but  in  case  of  contest  it  is  valuable  evidence,  and  would  have  weight  in  court. 


Form  78. 
FIRST  MEETING  OF  DIRECTORS. 

The  first  meeting  of  the  board  of  directors  was  held  at  on 

the  day  of  ,  i       ,  at      M. 

Present:    Messrs.  , 

constituting  of  the  board. 

Mr.  was  elected  temporary  chairman,  and  Mr. 

was  elected  temporary  secretary  of  the  meeting. 

1.  The  secretary  presented  and  read  a  waiver  of  notice  of  the  meeting, 
signed  by  all  the  directors,  and  the  same  was  ordered  filed. 

2.  The  minutes  of  the  first  meeting  of  incorporators  were  read. 

3.  The  following  gentlemen  were  duly  elected  officers  of  the  company 
to  serve  for  one  year  and  until  their  successors  are  elected  and  qualify: 

President.  ;  vice-president, 

4.  The  following  gentlemen  were  duly  appointed  secretary  and  treas- 
urer, respectively,  to  serve  during  the  pleasure  of  the  board: 

The  president  thereupon  took  the  chair. 

5.  It  was  ordered  that  the  secretary  take  the  oath  of  office  and  subscribe 
the  written  oath  in  the  form  presented  at  this  meeting.  The  secretary 
thereupon  took  and  subscribed  the  oath  and  entered  upon  the  discharge 
of  his  duties. 

6.  It    was    ordered    that    the    treasurer    give    a    bond    in    the    sum    of 


ig6  FORMS    AND    PRECEDENTS. 

dollars,  in  the  form  presented  at  this  meeting,  which 
was  approved  by  the  board,  and  submit  said  bond  to  the  board  for  ap- 
proval as  to  the  sufficiency  of  the  surety.     The  treasurer  thereupon  pre- 
sented his  bond,  signed  by  himself  as  principal,  and  by 
as  surety,  and  the  same  was  approved  and  ordered  to  be  filed. 

7.  Messrs.  were  appointed 
members  of  the  executive  committee;  Mr.  to  be  the 
chairman  thereof. 

8.  The  secretary  was  authorized  and  directed  to  procure  a  corporate 
seal  and  the  proper  corporate  books. 

9.  Upon  motion  duly  made  and  seconded,  it  was 

Resolved.  That  the  treasurer  be  and  he  hereby  is  authorized  to  open 
a  bank  account  in  behalf  of  the  company  with  the 
Bank  of 

Further  resolved,  That  until  otherwise  ordered  said  bank  be  and  hereby 
is  authorized  to  make  payments  from  the  funds  of  this  company  on  de- 
posit with  it  upon  and  according  to  the  check  of  this  company  signed 
by  its 

10.  Upon  motion,  duly  made  and  seconded,  it  was 

Resolved.  That  an  office  of  the  company  be  established  and  maintained 
at  .  in  the  city  of  .  state  of 

and  that  meetings  of  the  board  of  directors  from  time  to  time  may  be  held 
either  at  the  principal  office  in  the  state  of  Delaware,  or  at  such  office  in 
the  city  of  or  elsewhere,  as  the  board  of  directors  shall 

from  time  to  time  order. 

11.  Upon  motion,  duly  made  and  seconded,  it  was 
Resolved.  That  this  company  enter  into  a  contract  offered  bj- 

to  this  company  in  accordance  with  the  resolution  of  the 
stockholders  passed  .  authorizing  the  same,  and 

the  board  of  directors  do  hereby  adjudge  and  declare  that  said  property 
and  services  are  of  the  fair  value  of  dollars,  and  that 

the  same  are  necessary  for  the  business  of  this  company. 

Further  resolved.  That  the  proposed  agreement  for  the  sale  of  said 
property  presented  at  this  meeting  be  and  the  same  hereby  is  approved 
as  to  form,  and  the  and  of  the  company  are  hereby 

authorized  and  directed  to  execute  said  agreement  in  the  name  and  on 
behalf  of  this  company  and  to  affix  the  corporate  seal  thereto: 

Further  resolved.  That  the  president  and  treasurer  be  and  they  hereby 
are  authorized  and  directed  to  issue  to  the  order  of  said 
its   full    paid    capital    stock    of   this    company   to    the   aggregate    amount 
of  .  as  provided  in  said  agreement. 

12.  Upon  motion,  duly  made  and  seconded,  it  was 

Resolved.  That  an  assessment  of  one  hundred  per  cent,  be  levied  upon 
the  shares  of  stock  subscribed  by  the  incorporators,  as  evidenced  by  the 
certificate  of  incorporation. 

Further  resolved.  That  in  compliance  with  the  resolution  of  the  incor- 
porators' meeting,  the  company  accept  in  payment  of  said  subscriptions 


FORMS    AND    PRECEDENTS.  197 

and  assessment  the  property  agreed  to  be  sold  and  the  services  and  labor 
agreed  to  be  rendered  to  the  company  as  set  forth  in  the  preceding  reso- 
lutions. 

13.  Upon  motion,  duly  made  and  seconded,  it  was 

Resolved,  That  the  proper  officers  of  this  company  be  and  they  hereby 
are  authorized  and  directed  in  behalf  of  the  company,  and  under  its  cor- 
porate seal,  or  otherwise,  to  make  and  file  the  certificate  or  statement 
required  by  law  to  be  filed  in  any  state  in  which  the  officers  of  the  com- 
pany shall  find  it  necessary  to  file  the  same  to  authorize  the  company 
to  transact  business  in  such  state. 

14.  The  secretary  was  ordered  to  make  and  file  in  the  office  of  the  secre- 
tary of  state  of  Delaware  the  statement  of  officers,  directors,  etc.,  required 
by  section  4  of  "An  act  to  raise  revenue"  (law  of  1899),  of  Delaware,  and 
the  president  was  also  directed  to  sign  such  statement. 

15.  Upon  motion  it  was 

Resolved,  That  the  president  and  secretary  be  and  hereby  they  are  au- 
thorized and  directed  to  make  and  to  file  in  the  office  of  the  secretary  of 
state  a  certificate  stating  that  the  capital  stock  of  this  company  has  been 
paid,  $  in  cash,  and  $  by  the  purchase  of  property. 

[Note. — This  certificate  is  not  usually  fiJed  until  the  full  amount  of  capital  with  which  the 
company  is  authorized  to  do  business  has  been  paid  in.     See  section  31.] 

16.  Resolved,  That  a  copy  of  each  of  the  following  papers  be  inserted 
in  the  minute  book  for  the  purpose  of  reference: 

(i)  Waiver  of  notice  of  this  meeting.     (Found  at  p.        .) 

(2)  Secretary's  oath.     (Found  at  p.        .) 

(3)  Treasurer's  bond.     (Found  at  p.        .) 

(4)  Statement  of  officers  and  directors  filed  in  the  office  of  the  secretary 
of  state  of  Delaware.     (Found  at  p.        .) 

(5)  Certificate  of  the  secretary  of  state  as  to  filing  such  statement. 
(Found  at  p.         .) 

(6)  Agreement  between  and  this  company  for 
the  purchase  of  property  and  issue  of  stock  therefor.     (Found  at  p.         .) 

(7)  Certificate  of  payment  of  capital  stock.     (Found  at  p.         .) 

No  further  business  was  presented,  and  on  motion  the  meeting  ad- 
j«"''"^d.  Secretary. 

Form  79. 

CERTIFICATE  OF  THE  SURRENDER  OF  CORPORATE 
FRANCHISES. 
The  location  of  the  principal  office  in  this  state  is  at  No. 
street,   in   the  of  county   of 

The  name  of  the  agent  therein  and  in  charge  thereof,  upon  whom 
process  against  this  corporation  may  be  served,  is 

We,  the  subscribers,  being  all  the  incorporators  named  in  the  certifi- 
cate of  incorporation  of  the  Company, 


198  FORMS    AND    PRECEDENTS. 

a  corporation  of  Delaware,  do  hereby  certify  that  no  part  of  the  capital 
of  said  corporation  has  been  paid,  and  the  business  for  which  the  corpora- 
tion was  created  has  not  been  begun. 

And  we  do  hereby  surrender  all  our  corporate  rights  and  franchises 
which  we  have  obtained  by  the  creation  of  said  corporation,  to  the  end 
that  said  corporation  may  be  forthwith  dissolved. 

Witness  our  hands  and  seals  day  of  ,  A.  D.  i         . 

[L.  S.] 
[L.  S.] 
[L. 

State  of 

County  of 

being  severally  duly  sworn  on  their  oaths  say  that  the  facts  stated  and 

certified  in  the  foregoing  certificate  are  true. 

Subscribed  and  sworn  to  before  me 
this  day  of  A.  D.  i        . 


y  ss. : 


Form  80. 


CERTIFICATE  OF  DISSOLUTION  BY  UNANIMOUS  CONSENT 

OF  ALL  STOCKHOLDERS 
of  the  Company. 

The  location  of  the  principal  office  in  this  state  is  at  No. 
street,  in  the  of  .  county  of 

The   name   of   the   agent   therein   and    in    charge   thereof,    upon    whom 
process  against  this  corporation  may  be  served,  is 

We,  the  subscribers,  being  all  the  stockholders  of  the 
Company,  a  corporation  of  the  state  of  Delaware,  deeming  it  advisable 
and  most  for  the  benefit  of  said  corporation  that  the  same  should  be  forth- 
with dissolved,  do  hereby  give  our  consent  to  the  dissolution  thereof,  as 
provided  by  section  34  of  the  general  corporation  laws  of  the  state  of 
Delaware,  and  do  sign  this  consent,  to  the  end  that  it  may  be  filed  in  the 
office  of  the  secretary  of  state  of  the  state  of  Delaware. 

Witness  our  hands  this  day  of  ,  A.  D.  i 

State  of 
County  of 

the  secretary  of  the  above  named 
company,  being  duly  sworn,  on  his 
oath  says  that  the  foregoing  consent  to  the  dissolution  of  said  corpora- 
tion has  been  signed  by  every  stockholder  of  said  company. 

.Subscribed  and  sworn  to  before  me, 
this  day  of  A.  D.  i 

(Add  lilt  of  directors  and  officer*  at  time  of  disiolution.) 

In  dissolution  by  unanimous  consent,  affidavit  of  publication  is  not  ex- 
pressly required,  but  it  is  the  better  practice  to  file  such  affidavit. 


I"  ss. : 


FORMS    AND    PRECEDENTS. 


199 


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Form  81. 

PREFERRED  STOCK. 


[number] 


[shares] 


INCORPORATED  UNDER  THE   LAWS   OF   THE   STATE   OF 
DELAWARE. 


Common  stock  $ 


Capital  stock, 

Prefered  stock,  $ 

Tlie  Company.. 

This  is  to  certify,  that 
is  the  registered  holder  of  shares 

of  the  preferred  capital  stock  of  this  company,  trans- 
ferable only  on  the  books  of  this  company,  in  person  or 
by  duly  authorized  attorney,  upon  surrender  of  this 
certificate. 

This   stock  is  part  of  an   issue  amounting  in  all   to 
$  par  value,  authorized  by  the 

certificate  of  incorporation  of  the  company,, 
filed  in   the   office   of   the   secretary   of   state 
of  the  state  of  Delaware,  on  the 
day  of  ,  189     . 

The  holders  of  this  preferred  stock  are 
entitled  to  receive,  and  the  company  is 
bound  to  pay  a  fixed  yearly  dividend 
of  per   centum   per   annum,   payable 

half  yearly,  before  any  dividend  shall  be  set 
apart  or  paid  on  the  general  stock,  and  the 
dividends  of  the  preferred  stock  are  cumu- 
lative. The  preferred  stock  is  subject  to 
redemption   at  par  on  the  day  -of 

,  189     ,  and  the  holders  of  the 
preferred  stock  may  choose  directors, 

and  the  holders  of  the  general  stock  may 
choose  directors  of  the   company. 

Witness,  the  seal  of  the  company  and  the 
signatures  of  its  president  and  treasurer, 
Wilmington,  Delaware,  the  day 

of  ,  189    . 

President. 


Treasurer. 


Shares  $100  each. 


200 


FORMS    AND    PRECEDENTS. 


Form  82. 


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•^  6  ?J  3  i         I    ASSIGNMENT    ON    BACK    OF    CERTIFICATE. 

5  "^  ^  c«  -^   >  For  value  received.  hereby  sell,  assign  and 

transfer  unto 

Shares  of  the  capital  stock,  represented  by  the 
within  certificate,  and  do  hereby  irrevocably  consti- 
tute and  appoint 

attorney,  to  transfer  the  said  stock  on  the  books  of 
the  within  named  company,  with  full  power  of  substi- 
tution in  the  premises. 

[L.  S.] 

Dated  ,  i8    . 

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Form  83. 


CERTIFICATE  OF  CHANGE  OF  LOCATION  OF  THE  PRINCI- 
PAL OFFICE  OF 
The  Company. 

RESOLUTION   OF  DIRECTORS. 

"The  board  of  directors  of  the 
Company,  a  corporation  of  Delaware,  on  this  day  of 

,  A.  D.  189  ,  do  hereby  resolve  and  order  that  the 
location  of  the  principal  ofifice  of  this  corporation  within  this  state  be, 
and  the  same  hereby  is,  changed  from 

in  the  county  of  .  to  No.  street, 

in  the  county  of 

The  name  of  the  agent  therein  and   in   charge  thereof,   upon   whom 
process  against  this  corporation  may  be  served,  is 


CERTIFICATE  OF   CHANGE.      . 

The  Company,  a  corpora- 

tion of  Delaware,  doth  hereby  certify  that  the  foregoing  is  a  true  copy  of 
a  resolution  adopted  by  the  board  of  directors  by  a 
vote  of  the  members  thereof  at  a  meeting  held  as  therein  stated. 

In  witness  whereof,  said  corporation  has  caused  this  certificate  to  be 

signed  by  its  president  and  secretary,  and  its  corporate  seal  to 

[l.  s.]         be  hereby  affixed,  the  day  of  .  A.  D.  189     . 

President. 

Secretary. 


FORMS    AND    PRECEDENTS. 


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Form  84. 
STOCK  CERTIFICATES. 

COMMON  STOCK. 

INCORPORATED   UNDER  THE   LAWS   OF   THE   STATE   OF 
DELAWARE. 

Capital  stock        -        -        -        $ 

[number]  [shares] 

The  Company. 

This  is  to  certify,  that 

is  the  registered  holder  of 
shares  of  the  capital  stock  of  this  company, 
transferable  only  on  the  books  of  the  com- 
pany by  the  holder  hereof,  in  person  or  by 
duly  authorized  attorney,  upon  surrender 
of  this  certificate  properly  endorsed. 
[seal.]  This  certificate  will  not  become  valid  until 
countersigned  by  the  transfer  agent. 

Witness,  the  seal  of  the  company  and  the 
signatures  of  its  president  and  treasurer, 
this  day  of  .    189     . 

President. 
Treasurer. 
Shares  $100  each. 


Form  85. 


NOTICE  OF  ASSESSMENT  OF  STOCK. 

The  Company, 

No.         St.,  Delaware. 

Notice  is  hereby  given  that  by  resolution  of  the  board  of  directors, 
duly  authorized  by  the  stockholders,  an  assessment  of  per  cent,  on 
the  capital  stock  of  this  company  is  now  called  for,  payable  to  , 

treasurer,  No.  street,  ,  on  or  before 

,  I  Checks  should  be  drawn  to  the  order  of  the 

treasurer. 

President. 


Form  86. 

NOTICE  OF  S.ALE  OF  STOCK  FOR  NON-PAYMENT  OF  AS- 
SESSMENTS. 

sale   of   STOCK   OF   THE  COMPANY. 

Notice  is  hereby  given  that  pursuant  to  an  order  of  the  board  of  direct- 
ors, and   in   pursuance   of  the   statute   in   such   case   made   and   provided, 


202  FORMS    AND    PRECEDENTS. 

the  undersigned,  the  treasurer  of  the  Company, 

will  sell  at  public  auction  on  the  day  of  .  at  o'clock 

in  the  noon,  at  ,  shares  of  the  capital  stock  of  said  com- 

pany, standing  in  the  name  of  ,  or  so  many  of  said  shares 

as  will  pay  $  .  being  the  amount  of  unpaid  assessments  on  said 

shares  now  due  from  said  ,  and  also  the  interest  thereon 

from  to  the  date  of  sale,  and  all  necessary 

incidental  charges. 

$  has  been  paid  to  the  company  on  each  of  said  shares. 

An  assessment  of  $  is  now  due  on  each  of  said  shares,  which 

assessment  the  purchaser  must  forthwith  pay  on  each  share  in  addition 
to  the  amount  of  his  bid. 
Dated 

Treasurer. 

(Notice  of  iuch  sale  must  be  given,  and  the  sale  duly  advertised.     See  sections  13  and  30.  ante.) 


Form  87. 

AMENDED  CERTIFICATE  OF  INCORPORATION  BEFORE 
PAYMENT  OF  CAPITAL  STOCK. 

We,  the  undersigned,  being  all  the  incorporators  of  the 
Company,  do  hereby  certify  that  the  original  certificate  of  incorporation 
of  said  company  was  recorded  in  the  office  of  the  recorder  of  deeds  of  the 
county  of  ,  on  the  day  of  ,  in  book  ,  etc.. 

and  filed  on  the  day  of  in  the  office  of  the  secretary 

of  state  at  Dover,  and  that  no  part  of  the  capital  stock  has  been  paid. 

The  location  of  the  principal  office    in    the    state    of    Delaware    is    at 
street,  in  the  of  .  county  of 

The  name  of  the  agent  therein  and  in  charge  thereof,  upon  whom 
process  against  this  corporation  may  be  served,  is 

We  do,  therefore,  pursuant  to  the  provisions  of  section  134  of  the  gen- 
eral corporation  laws  of  the  state  of  Delaware,  amend  said  original  cer- 
tificate of  incorporation  so  as  to  read  as  follows: 

(Set  forth  in  full  the  original  certificate  of  incorporation,  including  the  acknowledgment,  with 
such  modifications,  changes  or  alterations  as  are  desired.  Then  add  the  usual  in  testimonium 
clause  and  the  usual  form  of  acknowledgment.) 


Form  88. 

FORM  OF  ACKNOWLEDGMENT. 

State  of  1 

County  of  J  ^^•• 

Be  it  remembered  that  on  this  day  of  .  A.  D. 

personally   came   before   me  ,   a   notary   public   for   the 

state  of 


FORMS    AND    PRECEDENTS.  2O3 

parties  to  the  foregoing  certificate  of  incorporation,  known  to   me   per- 
sonally to  be  such,  and  severally  acknowledged  the  said  certificate  to  be 
the  act  and  deed  of  the  signers   respectively  and  that  the  facts  therein 
stated  are  truly  set  forth. 
Given  under  my  hand  and  seal  of  office  the  day  and  year  aforesaid. 


Form  89. 

TRANSFER  OF  SUBSCRIPTION. 

The  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

Know  all  men  by  these  presents.  That  I,  ,  in  con- 

sideration of  one  dollar,  lawful  money  of  the  United  States,  to  me  paid 
before  the  ensealing  and  delivery  of  these  presents,  the  receipt  whereof 
is  hereby  acknowledged,  and  for  other  good  and  valuable  considerations, 
have  sold,  assigned,  transferred  and  set  over,  and  by  these  presents  do 
sell,  assign,  transfer  and  set  over  unto 

my  right,  title  and  interest  as  a  subscriber  to  and  an  incorporator  of  the 
company,  a  corporation  organized  under  the  laws  of  the 
state  of  Delaware,  to  the  extent  of  shares,  and  I  do  hereby  re- 

quest and  direct  the  said  company  to  issue  the  certificate  for  said 
shares  to  and  in  the  name  of  said  ,  or  such  other  person 

as  he  may  name. 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  this 
day  of 


Sealed  and  delivered  in  the  presence  of 


[L.   S.] 


Form  90. 

AUTHORIZATION   TO   AGENT   IN    CHARGE   OF   PRINCIPAL 

OFFICE. 

At  a  meeting  of  the  of  ,  held  at  the 

office  of  the  company  on  the  day  of  ,   on  motion,   duly 

seconded,  it  was 

"Ordered,  (i)  That  in  compliance  with  the  laws  of  the  state  of  Dela- 
ware, this  corporation  have  and  continuously  maintain  a  principal  office 
and  place  of  business  within  the  state  of  Delaware,  and  have  an  agent  at 
all  times  in  charge  thereof,  and  upon  which  agent  process  against  this 
corporation  may  be  served,  and  therein  keep  either  the  original  or  dupli- 
cate stock  and  transfer  books  for  the  inspection  of  all  who  are  authorized 
to  see  the  same  and  for  the  transfer  of  stock.  That  the  said  books,  in 
which  the  transfers  of  stock  shall  be  registered  and  the  said  books  con- 
taining the  names  of  the  shareholders,  shall  be  at  all  times  during  the 
usual  hours  of  business,  open  to  the  examination  of  every  stockholder 
at  said  principal  office. 


204  FORMS    AND    PRECEDENTS, 

"That  the  name  of  this  corporation  be  at  all  times  conspicuously  dis- 
played at  the  entrance  of  its  principal  ofifice  in  this  state. 

"And  be  it  further  ordered,  until  this  resolution  be  revoked  by  the  stock- 
holders, 

"(2)  That  such  office  and  place  of  business  be  in  and  at  the  ofifice  of  the 
Trust  Company,  Wilmington,  Delaware,  and  that  this  com- 
pany be  registered  with  the  said  Trust  Company. 

"(3)  That  the  Trust  Company,  being  by  its  charter  ex- 

pressly authorized  to  act  in  Delaware  as  the  agent  of  corporations,  do- 
mestic and  foreign,  to  the  same  extent  as  a  natural  person,  a  resident  of 
the  state  of  Delaware,  be  and  hereby  is  appointed  the  agent  of  this  cor- 
poration for  all  of  the  aforesaid  purposes  and  the  agent  of  this  company 
upon  whom  legal  process  against  this  corporation  may  be  served  within 
the  state  of  Delaware,  and  also  the  transfer  agent  of  the  stock  of  this 
company. 

"(4)  That  the  stock  certificates  of  this  company  be  registered  and  coun- 
tersigned by  said  trust  company  as  transfer  agent." 

I,  ,  the  secretary  of  have  compared 

the  foregoing  resolution  with  the  original  thereof  as  recorded  in  the 
minute  book  of  said  company,  and  do  hereby  certify  the  same  to  be  a 
correct  and  true  transcript  therefrom  and  the  whole  of  said  original 
resolution. 

Given  under  my  hand  and  the  seal  of  the  company,  this 
daj'  of 

Secretary. 

[corporate  seal.]  

Form  91. 

WAIVER  OF  NOTICE  OF  MEETING  OF  INCORPORATORS 
AND  SUBSCRIBERS 

Of  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington.   Delaware. 

We,  the  undersigned,  being  all  the  incorporators  and  all  the  subscribers 
to  the  stock  and  all  the  parties  named  in  the  certificate  of  incorporation 
of  the  corporation  above  named,  organized  under  the  laws  of  the  state  of 
Delaware,  having  its  principal  office  with  the  Trust  Company, 

at  Wilmington,  Delaware,  do  hereby  waive  notice  of  the  time,  place  and 
purpose  of  the  first  meeting  of  the  stockholders  of  the  said  company,  and 
do  fix  the  day  of  ,  at  o'clock  in  the  noon,  as  the 

time,  and  the  office  of  the  Trust  Company.  Wilmington.  Dela- 

ware, as  the  place  of  the  first  meeting  of  the  incorporators  and  sub- 
scribers to  the  stock  of  said  company. 

And  we  do  hereby  waive  all  the  requirements  of  the  statutes  of  Dela- 
ware as  to  the  notice  of  this  meeting,  and  the  publication  thereof;  and  we 
do  consent  to  the  transaction  of  such  business  as  may  come  before  said 
meeting. 

Dated 


FORMS    AND    PRECEDENTS.  2O5 

Form  92. 
PROXY.     FIRST  MEETING  OF  INCORPORATORS. 

The  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,   Delaware. 

Know  all  men  by  these   presents,  That  the  undersigned,  a  subscriber 
for  shares  of  the  capital  stock  of  the  corporation  above  named, 

organized  under  the  laws  of  the  state  of  Delaware,  having  its  principal 
Delaware  office  and  being  registered  with  the  Trust  Company 

at  Wilmington,  do  hereby  constitute  and  appoint 

my  true  and  lawful  attorney,  in  my  name,  place  and  stead,  to  vote  upon 
the  stock  subscribed  for  by  me  or  standing  in  my  name,  as  my  proxy, 
at  the  meeting  of  the  incorporators  and  subscribers  to  the  capital  stock 
of  the  said  company,  to  be  held  at  the  company's  office,  Wilmington,  Del- 
aware, on  the  day  of  ,  or  on  such  other  day  as  the 
meeting  may  be  thereafter  held  by  adjournment  or  otherwise,  according 
to  the  number  of  votes  I  am  now  or  may  then  be  entitled  to  cast,  hereby 
granting  the  said  attorney  full  power  and  authority  to  act  for  me  and  in 
my  name  at  the  said  meeting  or  meetings,  in  voting  for  directors  of  the 
said  company  or  otherwise,  and  in  the  transaction  of  any  other  business 
which  may  come  before  the  meeting,  as  fully  as  I  could  do  if  personally 
present,  and  hereby  expressly  ratifying  and  confirming  all  that  my  said 
attorney  may  do  in  my  place,  name  and  stead. 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  this 
day  of 

Witness: 

[L.   S.] 

Form  93. 

INSPECTORS'  CERTIFICATE. 

Meeting  of  stockholders  of  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

State  of  1    ^  . 

County  of  ) 

and  ,   being   severally   sworn   upon 

their  respective  oaths,  do  promise  and  swear  that  they  will  faithfully, 
honestly  and  impartially  perform  the  duties  of  inspectors  of  election,  and 
will  to  the  best  of  their  skill  and  ability  conduct  the  election  to  be  held 
this  day  for  directors  of  the  corporation  above  named,  and  a  true  report 
make  of  the  same. 

Subscribed  and  sworn  to  this  day  of  ,  before  me. 

We,   the   susbcribers,   inspectors   of  election,   appointed   by   the   stock- 
holders of  the  company  above  named,  at  their  meeting  held  this 
day  of  ,  A.  D.  ,  do  report  that  having  taken  an  oath  im- 

partially to  conduct  the  election,  we  did  receive  the  votes  of  the  stock- 
holders by  ballot. 


206  FORMS    AND    PRECEDENTS. 

We  report  that  votes  were  cast,  and  that  the  following  persons 

received  the  number  of  votes  set  opposite  their  respective  names,  to  wit: 
For  Directors.  I         Number  of  Votes. 

All   of  which  is  respectfully  submitted  this  day   of  , 

I         .  at 

Inspectors. 

[Note. — In  Delaware  it  is  not  necessarily  required  that  inspectors  be  appointed  and  sworn  to 
conduct  an  election,  but  in  case  of  contest  it  is  valuable  evidence,  and  would  have  weight  in  court.] 


Form  94. 


WAIVER    OF    NOTICE    OF   THE    FIRST    MEETING    OF    THE 
BOARD  OF  DIRECTORS 

Of  Company    (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,   Delaware. 

We,  the  undersigned,  being  the  board  of  directors  elected  by  the  stock- 
holders of  the  above  named  corporation,  organized  under  the  laws  of  the 
state  of  Delaware,  do  hereby  waive  notice  of  the  time  and  place  of  the 
first  meeting  of  the  said  board  of  directors,  and  of  the  business  to  be 
transacted  at  said  meeting. 

W'e  designate  the  day  of  ,  at  o'clock  in  the 

noon  as  the  time,  and  as  the  place  of  the  first  meeting 

of  the  said  board  of  directors.  The  purpose  of  said  meeting  being  the 
election  of  officers,  the  authorization  of  the  issuing  of  the  stock  of  the 
said  company,  the  authorization  of  the  purchase  of  property  if  necessary 
for  the  business  of  the  company  and  the  transaction  of  such  other  busi- 
ness as  may  be  necessary  or  advisable  to  facilitate  and  complete  the  or- 
ganization of  said  company  for  the  purpose  of  carrying  on  its  contem- 
plated business.  And  we  do  hereby  waive  all  the  requirements  of  the 
laws  of  the  state  of  Delaware,  both  as  to  notice  and  the  publication  thereof 
of  the  time,  place  and  object  of  the  meeting. 

Dated 


Form  95. 

SECRETARY'S  OATH. 

The  Company  (incorporated). 

Registered  with  the  Trust   Company.  Wilmington,   Delaware. 

State  of  1 

I  ss. : 
County  of  J 

,  the  secretary  of  the  corporation  above  named, 
being  by  me  duly  sworn  upon  his  oath  deposes  and  says  that  he  will  faith- 
fully discharge  the  duties  of  secretary  of  the  aforesaid  corporation. 

Subscribed  and  sworn  to  before  me 
this  day  of 


,  FORMS    AND    PRECEDENTS.  20/ 

Form  96. 
TREASURER'S  BOND. 

The  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

Know  all  men  by  these  presents,  that  we, 
of  ,  as  principal,  and  of 

as  .surety,  are  held  and  firmly  bound  unto  the  above  named  corporation, 
its  successors  and  assigns,  in  the  sum  of  dollars  ($  ), 

lawful  money  of  the  United  States,  to  be  paid  to  such  corporation,  its 
successors  and  assigns,  for  which  payment,  well  and  truly  to  be  made, 
we  bind  ourselves,  our  executors  and  administrators,  jointly  and  sever- 
ally, firmly  by  these  presents. 

In   witness   whereof.   We   have  hereunto   set   our   hands   and   seals   this 
day  oi 

The  condition  of  the  above  obligation  is  that, 

Whereas,  the  said  has  been  duly  elected  and  is  about 

to  enter  upon  the  duties  of  his  ofifice  as  treasurer  of  the  above  named 
company. 

Now,  therefore,  if  he  shall  in  all  respects  fully  and  faithfully  discharge  his 
duties  as  such  treasurer,  so  long  as  he  shall  hold  the  said  ofilice  or  continue 
therein  during  the  term  for  Avhich  he  is  now  or  may  hereafter  be  elected, 
appointed,  or  hold  over,  and  also,  if,  in  case  of  his  death,  resignation  or 
removal  from  office  from  any  cause,  all  the  books,  papers,  vouchers, 
money  or  other  property  of  whatever  kind  in  his  possession  belonging  to 
the  corporation,  shall  be  forthwith  restored  to  the  corporation,  then  this 
obligation  is  to  be  void,  otherwise  to  be  in  full  force  and  virtue. 

[L.  S.] 
[L.  S.l 

Signed,  sealed  and  delivered  in  the  presence  of 


Form  97. 


WAIVER  OF  NOTICE  BY  STOCKHOLDERS  OF  PAYMENT  OF 

ASSESSMENT. 

Waiver  of  notice  by  the  stockholders  of  Company 

(incorporated). 

Registered  with  the  Trust   Company,  Wilmington,  Delaware. 

We,  the  undersigned,  being  all  subscribers  to  the  capital  stock  with 
which  this  company  begins  business,  do  hereby  waive  thirty  days'  notice 
of  the  time  and  place  of  the  payment  of  such  subscription,  and  we  do  also 
waive  all  the  requirements  of  the  laws  of  the  state  of  Delaware  as  to 
notice  of  assessment  and  payment,  and  we  agree  to  pay  any  part  or  all  of 
the  same  to  the  treasurer  of  the  company  on  demand,  and  at  such  time 
and  in  such  amounts  as  the  company,  by  its  board  of  directors,  may  direct. 

Dated 


208  FORMS    AND    PRECEDENTS.  , 

Form  98. 

WAIVER  OF  NOTICE  OF  ASSESSMENT. 

(Fuller  Form.) 

We,  the  undersigned,  being  all  the  incorporators,  all  the  subscribers  to 
the  capital  stock  and  all  the  stockholders  of  Company, 

do  hereby  waive  all  notice  of  a  meeting,  and  all  statutory  requirements 
relating  to  the  holding  of  any  meeting,  to  consider  the  subject  of  assess- 
ing and  calling  for  the  balance  remaining  unpaid  on  the  capital  stock  of 
said  company,  and  do  hereby  consent  that  said  subject  be  considered  at 
meeting  of  the  corporation  to  be  held  on  the  day  of  , 

I         .  at  o'clock  in  the  noon,  and   so  consent  and  agree   that 

at  said  meeting,  or  at  any  other  meeting,  the  board  of  directors  be  au- 
thorized, empowered  and  directed  to  assess  upon  all  capital  stock  the 
entire  balance  remaining  unpaid  thereon  up  to  the  par  value  thereof,  and 
to  assess  and  call  for  the  payment  of  such  sums  without  any  notice  what- 
ever, by  publication  or  otherwise,  and  do  hereby  waive  all  our  rights  to 
publication  of  notice  of  any  such  assessment,  and  all  statutory  require- 
ments concerning  such  assessment,  and  do  hereby  consent  and  agree  to 
pay  the  balance  remaining  unpaid  on  the  shares  of  capital  stock  of  said 
company  held  by  us  respectively,  up  to  the  par  value  of  said  shares,  with- 
out any  such  notice  or  publication  whatever,  and  immediately  upon  de- 
mand of  the  board  of  directors. 

Dated 

Witness:  

Form  99. 

INCREASE  OF  CAPITAL  STOCK,  CONSENT  AND  WAIVER 
OF  NOTICE  OF  MEETING. 

We.  the  undersigned,  being  all  the  incorporators  and  subscribers  to  the 
capital  stock  of  Company,  organized  under  the  laws 

of  the  state  of  Delaware,  do  hereby  waive  notice  of  the  time  and  place  of  a 
meeting  for  the  purpose  of  considering  the  advisability  of  increasing  the 
company's  capital  stock  and  the  number  of  shares  therein,  and  waive  all 
statutory  requirements  as  to  publication  or  service  of  such  notice:  do 
hereby  consent  that  said  matters  be  considered  at  a  meeting  of  the  corpo- 
ration to  be  held  on  the  day  of  .  i  .  at  o'clock 
in  the  noon,  and  do  likewise  consent  and  agree  that  at  said  meeting, 
or  any  other  meeting,  the  directors  be  authorized,  empowered  and  di- 
rected, to  take  all  proper  steps  in  said  matters  and  to  increase  the  com- 
pany's capital  stock  and  the  number  of  shares  therein  until  the  same 
shall  reach  the  amounts  named  in  the  company's  certificate  of  incorpora- 
tion as  its  total  authorized  capital  stock,  and  that  the  said  board  of  direct- 
ors be  authorized,  empowered  and  directed,  to  issue  the  additional  shares 
of  the  company's  capital  stock,  at  such  times  and  in  such  amounts  as  said 
board  shall  determine,  up  to  the  amount  of  the  company's  total  authorized 
capital  stock. 

Dated  at  i, 

Witness: 


!  FORMS    AND    PRECEDENTS.  2O9 

Form  100. 
PROXY.     STOCKHOLDERS'  MEETING. 

The  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

Know  all  men  by  these  presents,  That  the  undersigned,  being  the  owner 
of  shares  of  the  capital  stock  of  the  corporation  above  named, 

do  hereby  constitute   and  appoint  ,   my  true  and   lawful 

attorney,  in  my  name,  place  and  stead,  to  vote  upon  the  stock  owned  by 
me  or  standing  in  my  name,  as  my  proxy,  at  the  meeting  of 

the  stockholders  of  the  said  company,  to  be  held  at  the  company's  office, 
Wilmington,  Delaware,  on  the  day  of  ,  or  on  such  other 

day  as  the  meeting  may  be  thereafter  held  by  adjournment  or  otherwise, 
according  to  the  number  of  votes  I  am  now  or  may  then  be  entitled  to 
cast,  hereby  granting  the  said  attorney  full  power  and  authority  to  act 
for  me  and  in  my  name  at  the  said  meeting  or  meetings,  in  voting  for 
directors  of  the  said  company  or  otherwise,  and  in  the  transaction  of  such 
other  business  as  may  come  before  the  meeting,  as  fully  as  I  could  do  if 
personally  present,  with  full  power  of  substitution  and  revocation,  hereby 
ratifying  and  confirming  all  that  my  said  attorney  or  substitute  may  do  in 
my  place,  name  and  stead. 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal,  this 
day  of 

[L.  S.] 

Witness: 

Form  101. 
CERTIFICATE  TO  BANK. 

The  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

At  a  meeting  of  the  directors  of  this  company,  held  on  the  day 

of  ,  on  motion  duly  seconded,  it  was 

"Resolved,  That  ,  the  treasurer  of  this   company,   be 

and  he  hereby  is  instructed  and  empowered  to  open  and  keep  an  account 
of  deposit  and  discount  with  the  bank,  ,  in 

the  name  and  for  the  use  of  this  company,  to  deposit  in  said  bank  to  the 
credit  of  this  company  from  time  to  time,  any  and  all  moneys,  checks, 
drafts,  notes,  acceptances,  or  other  evidences  of  indebtedness  (whether 
belonging  to  this  company,  or  otherwise),  which  may  now  be  or  may 
hereafter  come  into  its  possession,  and  in  the  name  of  this  company  to 
withdraw  the  same  or  any  part  or  all  of  the  proceeds  thereof,  to  pledge 
the  credit  of  this  company  as  the  said  treasurer  may  from  time  to  time 
find  necessary  or  convenient,  and  for  these  and  all  other  purposes,  to  sign, 
endorse,  accept,  make,  execute  and  deliver  any  and  all  checks,  notes, 
drafts  and  bills  of  exchange." 

The  undersigned,  the  secretary  of  the  company  above  named,  has  com- 
14 


2IO  FORMS    AND    PRECEDENTS. 

pared  the  foregoing  resolution  with  the  original  thereof  as  recorded  in  the 
minute  book  of  said  company,  and  hereby  certifies  the  same  to  be  a  cor- 
rect and  true  transcript  therefrom  and  the  whole  of  said  original  reso- 
lution. 

Witness  the  seal  of  this  company,  attested  by  me. 

Dated 

Attest: 
[corporate  se.'VL.]  Secretary. 

Form  102. 

NOTICE  OF  ANNUAL  MEETING 

Of  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

The  annual  meeting  of  the  stockholders  of  this  company  will  be  held 
on  the  day  of  ,  at  o'clock  in  the  noon,  at  the 

ofifice  of  the  Trust  Company,  Wilmington,  Delaware,  for  the 

purpose  of  electing  a  board  of  directors  and  receiving  and  acting  upon 
the  reports  of  the  officers  (insert  any  other  business  to  be  transacted), 
and  for  the  transaction  of  such  other  business  as  may  properly  come  be- 
fore the  meeting. 

In  accordance  with  the  laws  of  the  state  of  Delaware,  no  stock  can  be 
voted  on  which  has  been  transferred  on  the  books  of  the  company  within 
twenty  days  next  preceding  this  election. 

Dated 
,  Secretary. 

Form  103. 

RESIGNATION. 
The  Company  (incorporated). 

Registered  with  the  Trust  Company,  Wilmington,  Delaware. 

Wilmington,  Del.\ware, 
To  the  president  and  board  of  directors  of  Company. 

Gentlemen:    I  hereby  tender  my  resignation  as  director  and 
of  the  company,  the  same  to  take  effect  at  once,  or  at  your  option  at  any 
.time  before  the  next  annual  election  of  directors  and  officers. 

Yours  truly. 


Form  104. 


"CERTIFICATE  OF  DISSOLUTION  BY  VOTE  OF  DIRECTORS 
AND  CONSENT  OF  STOCKHOLDERS  (NOT  UNANIMOUS). 

The  location  of  the  principal  office  in  this  state  is  at  No. 
-street,  in  the  of  ,  county  of 

The  name   of  the  agent  therein   and   in   charge  thereof,   upon   whom 
■jprocess  against  this  corporation  may  be  served,  is 


FORMS    AND    PRECEDENTS.  211 

We,  the  undersigned,  being  a  majority  of  the  board  of  directors  of 
the  ,  do  hereby  certify,  that  at  a  meeting  of  the  said 

board,  called  for  that  purpose  and  held  on  the  day  of  , 

A.  D.  I  ,  said  board  by  a  majority  of  the  whole  board,  did  adopt  the 
following  resolution: 

Resolved,  That  in  the  judgment  of  this  board,  it  is  advisable  and  most 
for  the  benefit  of  the  that  the  same  should  be  forthwith 

dissolved;  and  to  that  end  it  is  ordered,  that  a  meeting  of  the  stockholders 
be  held  on  the  day  of  ,  A.  D.  i        , 

at  the  office  of  the  company,  in  the  city  of  ,  to  take  action 

upon  this  resolution;  and  further,  that  the  secretary  forthwith  give  notice 
of  said  meeting,  and  of  the  adoption  of  this  resolution,  within  ten  days 
from  this  date,  by  publishing  the  said  resolution,  with  a  notice  of  its 
adoption,  in  the  ,  a  newspaper  published  in  the  county  wherein 

the  principal  ofifice  of  the  company  is  located,  for  at  least  four  weeks,  once 
a  week,  successively,  and  by  mailing  a  written  or  printed  copy  of  the 
same  to  each  and  every  stockholder  of  this  company  in  the  United  States. 

In  witness  whereof,  we  have  hereunto  set  our  hands  and  affixed  the 
corporate  seal  of  said  company,  this  day  of  ,  A.  D.  i 

[corporate  seal.] 

Attest:  Secretary. 


CONSENT   OF   STOCKHOLDERS  TO   DISSOLUTION. 

Whereas,  on  the  day  of  ,  A.  D.  i         ,  the  directors  of 

the  ,   by  a  majority  vote  of  the   whole   board,   at  a 

meeting  called  for  that  purpose,  of  which  meeting  every  director  received 
at  least  three  days'  notice,  did  adopt  a  resolution  in  the  words  or  to  the 
effect  following,  to  wit: 

"Resolved,  That  in  the  judgment  of  this  board  it  is  advisable  and  most 
for  the  benefit  of  the  that  the  same  should  be  forthwith 

dissolved;  and  to  that  end  it  is  ordered,  that  a  meeting  of  the  stockholders 
be  held  on  the  day  of  ,  A.  D.  i 

at  the  office  of  the  company,  in  ,  to  take  action  upon  this 

resolution;  and  further,  that  the  secretary  forthwith  give  notice  of  said 
meeting  and  of  the  adoption  of  this  resolution,  within  ten  days  from  this 
date,  by  publishing  the  said  resolution  with  a  notice  of  its  adoption  in 
the  ,  a  newspaper  published  in  the   county   wherein  the 

principal  office  of  the  company  is  located,  for  at  least  four  weeks,  once  a 
week,  successively,  and  by  mailing  a  written  or  printed  copy  of  the  same 
to  each  and  every  stockholder  of  this  company  in  the  United  States." 

And  whereas,  the  secretary  of  the  said  company  did  give  notice  of  the 
meeting  of  the  stockholders,  called  by  said  resolution  as  required  by  law 
and  the  said  resolution: 

Now,  therefore,  we,  the  subscribers,  being  more  than  two-thirds  in 
interest  of  all  the  stockholders,  being  met  together  in  pursuance  of  said 


212  FORMS    AND    PRECEDENTS. 

resolution  and  notice,  have  consented  and  do  hereby  consent  that  the 
said  company  be  forthwith  dissolved  as  proposed  in  said  resolution. 
Witness  our  hands,  this  day  of  ,  A.  D.  i 

Shares.  Shares. 

Shares.  Shares. 


Secretary. 


Attest: 

State  of  )    ^^ 

County  of  J 

,  being  duly  sworn,  on  his  oath  says,  that  he  is 
secretary  of  the  ,  that  he  saw  .  being 

more  than  two-thirds  in  interest  of  the  stockholders  of  said  company,  at 
a  meeting  duly  called  for  the  purpose  as  above  recited,  sign  the  foregoing 
certificate  of  consent  as  their  voluntary  act  and  deed,  and  that  deponent 
at  the  same  time  subscribed  the  same  as  attesting  witness;  and  deponent 
further  says,  that  on  the  day  of  ,  A..  D.  ,  he  mailed 

a  printed  copy  of  the  resolution  above  recited,  with  a  notice  of  the  adop- 
tion thereof,  to  each  and  every  stockholder  of  said  company  residing  in 
the  United  States,  and  also  caused  the  same  to  be  duly  published  as  re- 
quired by  the  said  resolution;  and  deponent  further  says,  that  the  said 
resolution  of  the  board  of  directors  was  duly  adopted  upon  lawful  notice 
as  in  the  certificate  above  recited. 
Sworn  and  subscribed  before  me, this 
day  of  ,  A.  D.  i 

State  of  \  „  . 

County  of  J 

,  of  lawful  age,  being  duly  sworn  according  to 
law,  doth  depose  and  say,  that  he  is  of  , 

a  newspaper  printed  and  published  in  the  city  of 

and  county  of  and  state  of  Delaware,  and  that  the 

notice,  of  which  the  annexed  printed  slip  is  a  true  copy,  has  been  pub- 
lished in  said  newspaper,  successively,  for  the  period  of 
commencing  on  the  day  of  ,   i         . 

Sworn  and  subscribed  before  me,  the 
day  of  ,  A.  D.  i 

(Attach  copy  of  advertisement.) 


LIST   OF   DIRECTORS   AND   OFFICERS   AT  THE   TIME   OF   DISSOLUTION. 

As  required  by  the  "General  Corporation  Laws"  of  the  state  of  Dela- 
ware, the  board  of  directors  of  the  company  render  the  fol- 
lowing statement  to  be  filed  in  the  office  of  the  secretary  of  state  of  the 
state  of  Delaware,  upon  the  dissolution  of  said  company. 

The  location  of  the  principal  office  in  this  state  is  at  No. 
street,  in  the  of  county  of 

The  name  of  the  agent  therein  and  in  charge  thereof,  and  upon  whom 
process  against  the  corporation  may  be  served,  is 


FORMS    AND    PRECEDENTS.  2I3 

The  following  is  a  list  of  the  names  and  residences  of  the  directors  and 
ofticers  of  said  company: 

Names.  |  Residences. 

The  officers  of  the  company  are: 
President  Secretary 

Vice-President  Treasurer 

2d  Vice-President 
3d  Vice-President 

Dated  ,  189    . 

The  foregoing  statement  is  correct  and  true. 
Attest:  President. 

Secretary. 


Form  105. 
ANNUAL  REPORT. 

ANNUAL  RETURN   OF  CORPORATIONS  TO   THE   SECRETARY   OF   STATE. 

As  required  by  the  laws  of  the  state  of  Delaware  the 
company  renders  the  following  statement,  to  be  filed  in  the  office  of  the 
secretary  of  state: 

The   location   of  the   principal   office    in   the   state   of   Delaware   is   at 
county  of  Delaware. 

The  agent  of  the  company  in  charge  of  said  principal  office  is 
Trust  Company,  a  domestic  corporation,  whose  location  is  at 
Delaware. 

The  names  and  addresses  of  the  officers  and  director  resident  in  Dela- 
ware are  as  follows: 

Name.  Address. 

President 
Vice-President 
Treasurer 
Resident  Director 

The  number  and  par  value  of  shares  of  capital  stock  issued  and  out- 
standing is  shares. 

The  foregoing  statement  is  correct  and  true. 

Dated  I 

Attest:  President. 

Secretary. 

[NorK. — The  above  form  is  drawn  in  conformity  with  the  opinion  of  the  Hon.  J.  H.  Hughes 
secretary  of  state,  and  applies  to  the  general  class  of  corporations  designated  as  "all  other  cor- 
porations .  .  .  not  hereinbefore  provided  for,"  under  section  4,  of  "An  act  to  raise  revenue  for  the 
state  by  taxing  certain  corporations."  The  report  must  be  made  by  the  president,  treasurer,  or 
other  proper  officers,  and  filed  on  or  before  the  first  Tuesday  of  January  annually.] 


22  4  FORMS    AND    PRECEDENTS. 

Form  106. 

CERTIFICATE  OF  INCORPORATION 

OF   THE 

Pittsburg  and  Baltimore  Coal  Company. 

incorporated. 

registered  with  the 

Delaware  Trust  Company,  Wilmington,  Delaware. 

1.  The  name  of  the  corporation  is  the 

Pittsburg  and  Baltimore  Coal  Company. 

2.  The  location  of  its  principal  office  is  Wilmington,  Delaware,  and 
said  office  is  to  be  registered  with  the  Delaware  Trust  Company. 

3.  The  objects  and  purposes  for  which,  and  for  any  of  which,  the  cor- 
poration is  formed,  are:  To  purchase,  take  on  lease,  or  otherwise  ac- 
quire any  mines,  mining  rights  and  lands  and  coal  lands  in  Pennsylvania, 
or  elsewhere,  and  any  interest  therein,  and  to  explore,  work,  e.xercise, 
develop  and  turn  to  account  the  same,  to  mine,  prepare  for  market 
and  sell  or  otherwise  dispose  of  bituminous  coal,  manufacture  coke  or 
any  by-product  of  coal  or  coke,  and  sell  and  otherwise  dispose  of 
the  same,  or  either  of  them,  to  quarry,  smelt,  refine,  dress,  amalgamate 
and  prepare  for  market  ore  metal  and  mineral  substances  of  all  kinds. 

or  any  combination  or  manufacture  thereof,  and  to  buy  and  sell 
coal  and  coke  or  any  bi-product  thereof,  or  any  other  mineral  substance, 
and  to  carry  on  any  other  operation  which  may  seem  conducive 
to  any  of  the  company's  objects;  to  buy,  sell,  manufacture  and  deal  in 
minerals,  plant  machinery,  implements,  conveniences,  provisions,  goods, 
wares,  merchandise  and  things  capable  of  being  used  in  connection  with 
mining  operations,  or  required  by  workmen  and  others  employed  by  said 
company;  to  construct,  carry  out,  maintain,  improve,  manage,  work,  con- 
trol, operate  and  superintend,  own,  lease  or  otherwise  control  any  roads, 
ways,  bridges,  railways,  tramways,  tracks,  reservoirs,  water  courses, 
aqueducts,  wharves,  factories,  furnaces,  mills,  crushers,  houses,  hydraulic 
works,  water  works,  warehouses,  coal  yards,  and  other  works  and  con- 
veniences which  may  seem  directly  or  indirectly  conducive  to  any  of  the 
objects  of  the  company,  and  to  build  and  own  and  lease  and  sell  houses, 
and  to  buy,  lay  out  and  sell  in  lots  or  otherwise  dispose  of  lands,  tene- 
ments and  hereditaments,  and  to  contribute  to  subsidize  or  otherwise 
aid  or  take  part  in  any  such  operations,  and  for  these  purposes  to  pur- 
chase, own,  charter  and  operate  steam  boats,  steam  tugs,  barges  and  other 
boats  and  barges,  landings  and  other  appliances  and  equipment. 

In  furtherance  of,  and  not  in  limitation  of,  the  general  powers  conferred 
by  the  laws  of  the  State  of  Delaware,  it  is  hereby  expressly  provided  that 
the  company  shall  have  also  the  following  powers: 


FORMS    AND    PRECEDENTS.  21 5 

To  do  any  or  all  of  the  things  herein  set  forth,  to  the  same  extent  as 
natural  persons  might  or  could  do,  and  in  any  part  of  the  world. 

To  manufacture,  purchase  or  otherwise  acquire,  to  hold,  own,  mort- 
gage, pledge,  sell,  assign  and  transfer,  or  otherwise  dispose  of,  to  invest, 
trade,  deal  in  and  deal  with  goods,  wares  and  merchandise  and  property 
of  every  class  and  description. 

To  acquire  the  good  will,  rights  and  property,  and  to  undertake  the 
whole  or  any  part  of  the  assets  and  liabilities,  of  any  person,  firm,  asso- 
ciation or  corporation,  and  to  pay  for  the  same  in  cash,  stock  of  this  com- 
pany, bonds  or  otherwise. 

To  apply  for,  purchase,  or  otherwise  acquire,  and  to  hold,  own,  use, 
operate,  and  to  sell,  assign,  or  to  otherwise  dispose  of,  to  grant  licenses- 
in  respect  of  or  otherwise  turn  to  account  any  and  all  inventions,  im- 
provements and  processes  used  in  connection  with,  or  secured  under, 
letters-patent  of  the  United  States  or  elsewhere,  or  otherwise,  and  with  a 
view  to  the  working  and  development  of  the  same  to  carry  on  any  busi- 
ness, whether  manufacturing  or  otherwise,  which  the  corporation  may 
think  calculated  directly  or  indirectly  to  effectuate  these  objects. 

To  enter  into,  make,  perform  and  carry  out  contracts  of  every  kind 
■with  any  person,  firm,  association  or  corporation,  and,  without  limit  as  to 
amount,  to  draw,  make,  accept,  endorse,  discount,  execute  and  issue 
promissory  notes,  bills-  of  exchange,  warrants,  bonds,  debentures  and 
other  negotiable  or  transferable  instruments. 

To  have  one  or  more  ofifices,  to  carry  on  all  or  any  of  its  operations 
and  business,  and  without  restriction  to  the  same  extent  as  natural  per- 
sons might  or  could  do,  to  purchase  or  otherwise  acquire,  to  hold,  own, 
to  mortgage,  sell,  convey  or  otherwise  dispose  of,  real  and  personal  prop- 
erty of  every  class  and  description,  in  any  state,  district,  territory  or 
colony  in  the  United  States,  and  in  any  foreign  country  or  place. 

In  general  to  carry  on  any  other  business  in  connection  therewith, 
whether  manufacturing  or  otherwise,  and  with  all  the  powers  conferred, 
by  the  laws  of  Delaware  upon  corporations  under  the  act  hereinafter  re- 
ferred to. 

The  duration  of  the  corporation  shall  be  unlimited. 

4.  The  total  authorized  capital  stock  of  this  corporation  is  five  hundred 
thousand  dollars  ($500,000),  divided  into  five  thousand  (5.000)  shares  of 
one  hundred  dollars  ($100)  each.  There  being  but  one  class  of  stock,, 
to  wit:    Common  stock. 

5.  The  names  and  residences  of  the  incorporators  and  the  number  of 
shares  subscribed  for  by  each,  the  aggregate  of  which  ($1,000)  is  the 
amount  of  capital  with  which  the  company  will  commence  business,  are 
as  follows: 

Name.  Residence.  Shares. 

Edward  E.  Robbins,  Greensburg.  Pa.,  4 

Edward  M.  Steck,  Pittsburg,  Pa.,  3 

Gardner  W.  Kimball,        Wilmington.  Del.,  3 

6.  This  corporation  is  to  have  perpetual  existence.  i 


2l6  FORMS    AND    PRECEDENTS. 

The  aflfairs  of  this  corporation  are  to  be  conducted  by  its  directors, 
who  shall  be  elected  annually  on  the  fourth  Monday  in  January  in  each 
year  at  the  office  of  the  company  in  the  city  of  Pittsburg,  Pa.;  said  di- 
rectors shall  appoint  or  elect  such  officers  as  the  by-laws  may  prescribe. 

This  corporation  may  become  seized  and  possessed  of  real  and  personal 
estate  of  the  value  of  two  million  ($2,000,000)  dollars. 

The  highest  amount  of  indebtedness  or  liability  which  this  corporation 
may  at  any  time  incur  is  the  sum  of  two  million  ($2,000,000)  dollars. 

The  private  property  of  the  stockholders  shall  not  be  subject  to  the 
payment  of  the  corporate  debts  to  any  extent  whatever. 

7.  The  board  of  directors  shall  have  power  without  the  assent  or  vote  of 
the  stockholders  to  make,  alter,  amend  and  rescind  the  by-laws  of  this 
corporation,  to  fix  the  amount  to  be  reserved  as  working  capital,  to  au- 
thorize and  cause  to  be  executed  mortgages  and  liens  without  limit  as  to 
amount  upon  the  real  and  personal  property  of  this  corporation. 

With  the  consent  in  writing  and  pursuant  to  the  vote  of  the  holders 
of  a  majority  of  the  stock  issued  and  outstanding,  the  directors  shall 
have  power  and  authority  to  sell,  assign,  transfer  or  otherwise  dispose  of 
the  whole  property  of  this  corporation. 

The  directors  shall  from  time  to  time  determine  whether  and  to  what  ex- 
tent, and  at  what  times  and  places  and  under  what  conditions  and  regula- 
tions, the  accounts  and  books  of  the  corporation,  or  any  of  them,  shall  be 
open  to  the  inspection  of  the  stockholders;  and  no  stockholder  shall  have 
any  right  of  inspecting  any  account  or  book  or  document  of  the  corpora- 
tion, except  as  conferred  by  statute  or  authorized  by  the  directors,  or  by  a 
resolution  of  the  stockholders. 

The  board  of  directors,  in  addition  to  the  powers  and  authorities  by 
statute  and  by  the  by-laws  expressly  conferred  upon  them,  may  exercise 
all  such  powers  and  do  all  such  acts  and  things  as  may  be  exercised  or 
done  by  the  corporation,  but  subject,  nevertheless,  to  the  provisions  of 
the  statute,  of  the  charter,  and  to  any  regulations  that  may  from  time  to 
time  be  made  by  the  stockholders,  provided  that  no  regulations  so  made 
shall  invalidate  any  provisions  of  this  charter,  or  any  prior  acts  of  the 
directors  which  would  have  been  valid  if  such  regulations  had  not  been 
made. 

The  corporation  may  by  its  by-laws  confer  powers  additional  to  the 
foregoing  upon  the  directors,  and  may  prescribe  the  number  necessary  to 
constitute  a  quorum  of  its  board  of  directors,  which  number  may  be  less 
than  a  majority  of  the  whole  number. 

The  board  of  directors  may,  by  resolution  passed  by  a  majority  of  the 
-whole  board,  designate  two  or  more  of  their  number  to  constitute  an  ex- 
ecutive committee,  which  committee  shall  for  the  time  being,  as  provided 
in  said  resolution  or  in  the  by-laws  of  said  corporation,  have  and  exercise 
all  the  powers  of  the  board  of  directors  in  the  management  of  the  busi- 
ness and  aflfairs  of  the  company,  and  have  power  to  authorize  the  seal  of 
the  corporation  to  be  afifixed  to  all  papers  which  may  require  it. 

Neither  the  directors  nor  the  members  of  the  executive  committee  nor 


FORMS    AND    PRECEDENTS.  21/ 

the  president  nor  vice-president  shall  be  subject  to  removal  during  their 
respective  terms  of  office  except  for  cause,  nor  shall  their  terms  of  office 
be  diminished  during  their  tenure. 

Both  stockholders  and  directors  shall  have  power  to  hold  meetings, 
to  have  one  or  more  offices,  and  to  keep  the  books  of  the  corporation 
(subject  to  the  provisions  of  the  statute)  outside  of  this  State,  at  such 
places  as  may  be  from  time  to  time  designated  by  them. 

We,  the  undersigned,  for  the  purpose  of  forming  a  corporation  in  pur- 
suance of  an  act  of  the  legislature  of  the  State  of  Delaware,  entitled 
"An  Act  Providing  a  General  Corporation  Law,"  do  make,  record  and 
file  this  certificate,  hereby  declaring  and  certifying  that  the  facts  herein 
stated  are  true,  and  do  respectively  agree  to  take  the  number  of  shares 
of  stock  hereinbefore  set  forth,  and  accordingly  have  hereunto  set  our 
hands  and  seals. 

Edward  E.  Robbins,  [l.  s.] 

E.  M.  Steck,  [l.  s.] 

Gardner  W.  Kimball,  [l.  s.] 

In  presence  of 

Edward  T.  Price. 
[lo  cent  internal  revenue  stamp  canceled.] 

Recorded  in  the  Recorder  of  Deeds  office,  at  Wilmington,  Delaware, 
5n  Record  A,  Vol.  i.  Page  182,  etc. 


Form  107. 


CERTIFICATE  OF  INCORPORATION 

OF  THE 

Valley  Telephone  Company. 

incorporated. 

registered  with  the 

Delaware  Trust  Company,  Wilmington,  Delaware. 

1.  The  name  of  the  corporation  is  the 

Valley  Telephone  Company. 

2.  The  location  of  its  principal  office  is  Wilmington,  Delaware,  and  said 
office  is  to  be  registered  with  the  Delaware  Trust  Company. 

3.  The  objects  and  purposes  for  which,  and  for  any  of  which,  the  cor- 
poration is  formed,  are: 

1.  To  carry  on  the  telephone,  telegraph  and  messenger  business  in  all 
their  branches. 

2.  To  construct,  maintain,  lay  down  on  the  ground,  and  under  the 
same,  establish,  fix  and  carry  out  all  necessary  cables,  wires  and  lines; 
set  poles  and  in  all  things,  and  in  such  manner  as  may  be  necessary  and 
-expedient  generate,  accumulate,  distribute  and  supply  electricity;  and 
telephone,  telegraph  and  messenger  service  to  any  and  all  persons,  and 
lo  all  places,  both  public  and  private. 


2l8  FORMS    AND    PRECEDENTS. 

3.  To  buy,  sell,  manipulate  and  deal  both  wholesale  and  retail  in  com- 
modities, articles  and  things  of  all  kinds  which  can  be  conveniently  dealt 
in  by  the  company  in  connection  with  any  of  its  objects. 

4.  To  enter  into  contracts  with  such  parties  and  on  such  terms  as  may 
seem  expedient,  and  in  particular  to  customers  of,  and  persons  having; 
dealings  with  the  company. 

In  furtherance  of,  and  not  in  limitation  of,  the  general  powers  conferred^ 
by  the  laws  of  the  State  of  Delaware,  it  is  hereby  expressly  provided  that 
the  company  shall  have  also  the  following  powers: 

To  do  any  or  all  of  the  things  herein  set  forth,  to  the  same  extent  a& 
natural  persons  might  or  could  do,  and  in  any  part  of  the  world. 

To  manufacture,  purchase  or  otherwise  acquire,  to  hold,  own,  mort- 
gage, pledge,  sell,  assign  and  transfer,  or  otherwise  dispose  of,  to  invest>. 
trade,  deal  in  and  deal  with  goods,  wares  and  merchandise  and  property^ 
of  every  class  and  description. 

To  acquire  the  good  will,  rights  and  property,  and  to  undertake  the 
whole  or  any  part  of  the  assets  and  liabilities,  of  any  person,  firm,  asso- 
ciation or  corporation,  and  to  pay  for  the  same  in  cash,  stock  of  this 
company,  bonds  or  otherwise. 

To  apply  for,  purchase,  or  otherwise  acquire,  and  to  hold,  own.  use, 
operate,  and  to  sell,  assign,  or  to  otherwise  dispose  of,  to  grant  licenses 
in  respect  of  or  otherwise  turn  to  account  any  and  all  inventions,  improve- 
ments and  processes  used  in  connection  with,  or  secured  under,  letters-pat- 
ent of  the  United  States  or  elsewhere,  or  otherwise,  and  with  a  view  to  the 
working  and  development  of  the  same  to  carry  on  any  business,  whether 
manufacturing  or  otherwise,  which  the  corporation  may  think  calculated 
directly  or  indirectly  to  effectuate  these  objects. 

To  enter  into,  make,  perform  and  carry  out  contracts  of  every  kind' 
w^ith  any  person,  firm,  association  or  corporation,  and,  without  limit  as 
to  amount,  to  draw,  make,  accept,  endorse,  discount,  execute  and  issue 
promissory  notes,  bills  of  exchange,  warrants,  bonds,  debentures  and 
other  negotiable  or  transferable  instruments. 

To  have  one  or  more  of^ces,  to  carry  on  all  or  any  of  its  operations 
and  business,  and  without  restriction  to  the  same  extent  as  natural  per- 
sons might  or  could  do,  to  purchase  or  otherwise  acquire,  to  hold,  own, 
to  mortgage,  sell,  convey  or  otherwise  dispose  of,  real  and  personal  prop- 
erty of  every  class  and  description,  in  any  state,  district,  territory  or 
colony  of  the  United  States,  and  in  any  foreign  country  or  place. 

In  general  to  carry  on  any  other  business  in  connection  therewith,, 
whether  manufacturing  or  otherwise,  and  with  all  the  powers  conferred- 
by  the  laws  of  Delaware  upon  corporations  under  the  act  hereinafter  re- 
ferred to. 

The  duration  of  the  corporation  shall  be  unlimited. 

4.  The  total  authorized  capital  stock  of  this  corporation  is  thirty  thou- 
sand dollars  ($30,000),  divided  into  six  hundred  shares  (600)  of  fifty 
dollars  ($50)  each,  to  be  issued  as  the  common  stock  of  said  corporation. 

5.  The  names  and  residences  of  the  incorporators  and  the  number  of 


FORMS    AND    PRECEDENTS.  219 

shares  subscribed  for  by  each,  the  aggregate  of  which  ($30,000.00)  is  the 

amount    of   capital    with  which    the    company  will    commence    business, 
are  as  follows: 

Name.  Residence.  Shares. 

Frank  Brandon,  Lebanon,  O.,  596 

Gardner  W.  Kimball,  Wilmington,  Del.,  3 

Edward  T.  Canby,  Wilmington,  Del.,  i 

600 

6.  This  corporation  is  to  have  perpetual  existence. 

The  afifairs  of  this  corporation  are  to  be  conducted  by  its  directors. 
who  shall  be  elected  annually  on  the  second  Tuesday  in  December  in 
each  year  at  the  Lebanon  Exchange  ofifice  of  the  company  in  Lebanon, 
O.;  said  directors  shall  appoint  or  elect  such  officers  as  the  by-laws  may 
prescribe. 

This  corporation  may  become  seized  and  possessed  of  real  and  personal 
estate  of  the  value  of  five  hundred  thousand  ($500,000)  dollars. 

The  highest  amount  of  indebtedness  or  liability  which  this  corporation 
may  at  any  time  incur  is  the  sum  of  two  hundred  thousand  ($200,000) 
dollars. 

The  private  property  of  the  stockholders  shall  not  be  subject  to  the 
payment  of  corporate  debts  to  any  extent  whatever. 

7.  The  board  of  directors  shall  have  pow'er  without  the  assent  or  vote 
of  the  stockholders  to  make,  alter,  amend  and  rescind  the  by-laws  of  this 
corporation,  to  fix  the  amount  to  be  reserved  as  working  capital,  to  au- 
thorize and  cause  to  be  executed  mortgages  and  liens  without  limit  as 
to  amount  upon  the  real  and  personal  property  of  this  corporation. 

With  the  consent  in  writing  and  pursuant  to  the  vote  of  the  holders  of  a 
majority  of  the  stock  issued  and  outstanding,  the  directors  shall  have 
power  and  authority  to  sell,  assign,  transfer  or  otherwise  dispose  of  the 
whole  property  of  this  corporation. 

The  directors  shall  from  time  to  time  determine  whether  and  to  what 
extent,  and  at  what  times  and  places  and  under  what  conditions  and  regu- 
lations, the  accounts  and  books  of  the  corporation,  or  any  of  them,  shall 
be  open  to  the  inspection  of  the  stockholders;  and  no  stockholder  shall 
have  any  right  of  inspecting  any  account  or  book  or  document  of  the 
corporation,  except  as  conferred  by  statute  or  authorized  by  the  directors, 
or  by  a  resolution  of  the  stockholders. 

The  board  of  directors,  in  addition  to  the  powers  and  authorities  by 
statute  and  by  the  by-laws  expressly  conferred  upon  them,  may  exercise 
all  such  powers  and  do  all  such  acts  and  things  as  may  be  exercised  or 
done  by  the  corporation,  but  subject,  nevertheless,  to  the  provisions  of 
the  statute,  of  the  charter,  and  to  any  regulations  that  may  from  time  to 
time  be  made  by  the  stockholders,  provided  that  no  regulations  so  made 
shall  invalidate  any  provisions  of  this  charter,  or  any  prior  acts  of  the  di- 
rectors which  would  have  been  valid  if  such  regulations  had  not  been 
made. 


220  FORMS    AND    PRECEDENTS, 

The  corporation  may  in  its  by-laws  confer  powers  in  addition  to  the 
foregoing  upon  the  directors,  and  may  prescribe  the  number  necessary  to 
constitute  a  quorum  of  its  board  of  directors,  which  number  may  be  less 
than  a  majority  of  the  whole  number. 

The  board  of  directors  may,  by  resolution  passed  by  a  majority  of  the 
whole  board,  designate  two  or  more  of  their  number  to  constitute  an 
executive  committee,  which  committee  shall  for  the  time  being,  as  pro- 
vided in  said  resolution  or  in  the  by-laws  of  said  corporation,  have  and 
exercise  all  the  powers  of  the  board  of  directors  in  the  management  of 
the  business  and  affairs  of  the  company,  and  have  power  to  authorize 
the  seal  of  the  corporation  to  be  affixed  to  all  papers  which  may  requi'-e 
it. 

Neither  the  directors  nor  the  members  of  the  executive  committee 
nor  the  president  nor  vice-president  shall  be  subject  to  removal  during 
their  respective  terms  of  office  except  for  cause,  nor  shall  their  terms  of 
office  be  diminished  during  their  tenure. 

Both  stockholders  and  directors  shall  have  power  to  hold  meetings,  to 
have  one  or  more  offices,  and  to  keep  the  books  of  the  corporation 
(subject  to  the  provisions  of  the  statute)  outside  of  this  state,  at  such 
places  as  may  be  from  time  to  time  designated  by  them. 

We,  the  undersigned,  for  the  purpose  of  forming  a  corporation  in  pur- 
suance of  an  act  of  the  legislature  of  the  State  of  Delaware,  entitled 
"An  Act  Providing  a  General  Corporation  Law,"  do  make,  record  and 
file  this  certificate,  hereby  declaring  and  certifying  that  the  facts  herein 
stated  are  true,  and  do  respectively  agree  to  take  the  number  of  shares 
of  stock  hereinbefore  set  forth,  and  accordingly  have  hereunto  set  our 
hands  and  seals. 

Frank  Brandon,  [l.  s.] 

Gardner  W.  Kimball,        [l.  s.] 
Edward  T.  Canby,  [l.  s.] 

In  presence  of 
Edward  T.  Price. 

[lo  cent  internal  revenue  stamp  canceled.] 

Recorded  in  the  Recorder  of  Deeds  office,  at  Wilmington,  Delaware, 
in  Record  A,  Vol.  i,  Page  82,  etc. 


Form  108. 


CERTIFICATE  OF  INCORPORATION 

OF 

La  Flor  De  Costa  Rica  Coffee  Estates  Company. 

incorporated. 

registered  with  the 

Delaware  Trust  Company.  Wilmington.  Delaware. 

I.  The  name  of  the  corporation  is 

La  Flor  De  Costa  Rica  Coffee  Estates  Company. 


FORMS    AND    PRECEDENTS.  221 

2.  Its  principal  office  and  place  of  business  in  the  State  of  Delaware  is 
to  be  located  in  the  city  of  Wilmington,  county  of  New  Castle. 

3.  The  nature  of  the  business  and  the  objects  and  purposes  proposed 
to  be  transacted,  promoted  and  carried  on,  are  to  do  any  or  all  of  the  things 
herein  mentioned  as  fully  as  to  the  same  extent  as  natural  persons  might  or 
could  do,  and  in  any  part  of  the  world,  viz.,  to  purchase  or  otherwise  ac- 
quire, own,  hold,  lease,  control,  manage,  and  operate  farms,  plantations 
or  estates,  and  the  business  and  personal  property  incident  thereto,  and 
particularly  to  purchase,  acquire,  control,  manage  and  operate  the  plan- 
tation or  estate  known  as  "La  Flor,"  at  Peralta,  in  the  Canton  of  Turri- 
alba,  Costa  Rica,  and  the  buildings  and  personal  property  thereon,  and  to 
issue  the  whole  or  any  part  of  the  capital  stock  of  the  company  in  pay- 
ment therefor;  to  raise,  produce,  harvest,  market,  buy  and  sell  coffee, 
sugar,  tobacco,  corn  and  all  other  products  of  the  earth,  including  all 
kinds  of  timber,  and  woods  such  as  mahogany,  cedar,  and  other  tropical 
and  semi-tropical  trees,  to  breed  and  raise,  buy  and  sell  horses,  cattle 
and  all  kinds  of  live  stock;  to  do  anything  and  everything  necessary  or 
desirable  in  the  operation  of  the  estates  of  the  company,  or  tending  to 
advance  the  company's  interests. 

In  furtherance,  and  not  in  limitation,  of  the  general  powers  conferred 
by  the  laws  of  Delaware,  it  is  expressly  provided  that  this  corporation 
shall  also  have  the  following  powers,  viz.: 

To  take,  own,  hold,  deal  in,  mortgage,  or  otherwise  lien,  and  to  lease, 
sell,  exchange,  transfer,  or  in  any  maner  dispose  of,  real  property, 
wherever  situated. 

To  manufacture,  purchase  or  acquire  in  any  lawful  manner,  and  to  hold, 
own,  mortgage,  pledge,  sell,  transfer,  or  in  any  manner  dispose  of,  and  to 
deal  and  trade  in,  goods,  wares,  merchandise  and  property  of  any  and 
every  class  and  description. 

To  acquire  tHe  good  will,  rights  and  property  of  any  person,  firm, 
association  or  corporation;  to  pay  for  the  same  in  cash,  the  stock  of  this 
company,  bonds  or  otherwise;  to  hold  or  in  any  manner  to  dispose  of, 
the  whole  or  any  part  of  the  property  so  purchased;  to  conduct  in  any 
lawful  manner  the  whole  or  any  part  of  any  business  so  acquired,  and  to 
exercise  all  the  powers  necessary  or  convenient  in  and  about  the  conduct 
and  management  of  such  business. 

To  apply  for,  or  in  any  manner  to  acquire,  and  to  hold,  own,  use  and 
operate,  or  to  sell  or  in  any  manner  dispose  of,  and  to  grant  license  or 
other  rights  in  respect  of,  in  any  manner  deal  with  any  and  all  rights, 
inventions,  improvements  and  processes  used  in  connection  with  or  se- 
cured under  letters-patent  or  copyrights  of  the  United  States  or  other' 
countries,  and  to  work,  operate  or  develop  the  same,  and  to  carry  on 
any  business,  manufacturing  or  otherwise,  which  may  directly  or  indi- 
rectly effectuate  these  objects  or  any  of  them. 

To  enter  into,  make,  perform  and  carry  out  contracts  of  every  kind 
with  any  person,  firm,  association  or  corporation,  and,  without  limit  as 
to  amount,  to  draw,  make,  accept,  endorse,  discount,  execute  and  issue 


222  FORMS    AND    PRECEDENTS, 

promissory  notes,  bills  of  exchange,  warrants,  bonds,  debentures  and 
other  negotiable  or  transferable  instruments. 

To  have  one  or  more  offices  to  carry  on  all  or  any  of  its  operations 
and  business,  and  without  restriction  to  the  same  extent  as  natural  per- 
sons might  or  could  do,  to  purchase  or  otherwise  acquire,  to  hold,  own, 
to  mortgage,  sell,  convey  or  otherwise  dispose  of,  real  and  personal  prop- 
erty of  every  class  and  description,  in  any  state,  district,  territory  or 
colony  of  the  United  States,  and  in  any  foreign  country  or  place. 

To  do  any  or  all  of  the  things  herein  set  forth  to  the  same  extent  as 
natural  persons  might  or  could  do,  and  in  any  part  of  the  world  as  prin- 
cipals, agents,  contractors,  trustees  or  otherwise. 

In  general,  to  carry  on  any  other  business  in  connection  therewith, 
whether  manufacturing  or  otherwise,  and  with  all  the  powers  conferred 
by  the  laws  of  Delaware  upon  corporations  under  the  act  hereinafter  re- 
ferred to. 

4.  The  amount  of  the  total  authorized  capital  stock  of  this  corporation 
is  two  hundred  thousand  dollars  ($200,000),  divided  into  two  thousand 
shares  of  one  hundred  dollars  ($100)  each. 

5.  The  names  and  places  of  residence  of  each  of  the  original  sub- 
scribers to  the  capital  stock  are  as  follows: 

Name.  Residence.  Shares. 

Federico  Peralta,  San  Jose,  Costa  Rica,  3 

Juan  J.  Ulloa  G.,  San  Jose,  Costa  Rica,  3 

Alexander  S.  Bacon,         Brooklyn  Borough,  N.  Y.  City,  3 

Edward  O.  Schernikow,  Manhattan  Borough,  N.  Y.  City,  3 

David  Bennett  King,        Manhattan  Borough,  N.  Y.  City.  3 

Charles  Henry  Phelps,   Manhattan  Borough,  N.  Y.  City.  3 

Edward  T.  Canby,  Wilmington,  Delaware,  3 

6.  The  existence  of  this  corporation  is  to  be  perpetual. 

7.  The  aflfairs  of  the  corporation  are  to  be  conducted  by  the  officers 
and  persons  fixed  by  the  by-laws;  and  such  persons  are  to  be  chosen  at 
the  times  and  places  fixed  by  the  by-laws. 

8.  The  corporation  may  become  seized  and  possessed  of  either  real  or 
personal  estate,  or  both,  to  the  value  of  ten  million  dollars  ($10,000,000). 

9.  The  amount  of  indebtedness  or  liability  which  the  corporation  may 
at  any  time  incur  is  ten  million  dollars  ($10,000,000). 

10.  The  private  property  of  the  stockholders  shall  not  be  subject  to 
the  payment  of  corporate  debts  to  any  extent  whatever. 

11.  The  directors  shall  have  power  to  make  and  to  alter  the  by-laws;  to 
fix  the  amount  to  be  reserved  as  working  capital,  and  to  authorize  and 
cause  to  be  executed  mortgages  and  liens,  without  limit  as  to  amount, 
upon  the  property  and  franchises  of  the  corporation. 

With  the  consent,  in  writing,  and  pursuant  to  a  vote  of  the  holders  of 
seventy  per  cent,  of  the  capital  stock  issued  and  outstanding,  the  directors 
shall  have  authority  to  dispose  in  any  manner  of  the  whole  property  of 
this  corporation. 

The  by-laws  shall  determine  whether  and  to  what  extent  the  accounts 


FORMS    AND    PRECEDENTS.  223 

and  books  of  the  corporation,  or  any  of  them,  shall  be  open  to  the  in- 
spection of  the  stockholders;  and  no  stockholder  shall  have  any  right 
of  inspecting  any  account,  or  book,  or  document  of  the  corporation,  ex- 
cept as  conferred  by  law  or  the  by-laws,  or  by  resolution  of  the  stock- 
holders. 

The  stockholders  or  directors  shall  have  power  to  hold  their  meetings 
and  keep  the  books  outside  of  the  State  of  Delaware,  at  such  places  as 
may  be  from  time  to  time  designated. 

It  is  the  intention  that  the  objects  specified  in  the  third  paragraph 
hereof  shall,  except  where  otherwise  expressed  in  said  paragraph,  be 
nowise  limited  or  restricted  by  reference  to  or  inference  from  the  terms 
of  any  other  clause  or  paragraph  in  the  certificate  of  incorporation,  but 
that  the  objects  specified  in  each  of  the  clauses  of  this  charter  shall  be 
regarded  as  independent  objects. 

We,  the  undersigned,  for  the  purpose  of  forming  a  corporation  under 
the  laws  of  the  State  of  Delaware,  do  make,  record  and  filcthis  certificate, 
and  do  certify  that  the  facts  herein  stated  are  true;  and  we  have  accord- 
ingly hereunto  set  our  respective  hands  and  seals. 

Dated  at  the  city  of  New  York,  State  of  New  York,  this  29th  day  of 
June,  1899. 

In  the  presence  of 
Horace  K.  Wood. 

Federico  Peralta,  [seal.] 

Juan  J.  Ulloa  G.,  [seal.] 

Alexander  S.  Bacon,  [seal.] 

Edward  O.  Schernikow,      [seal.] 
David  Bennett  King,  [seal.] 

Charles  Henry  Phelps,      [seal.] 
Edward  T.  Canby,  [seal.] 

Recorded  in  the  Recorder  of  Deeds  office,  at  Wilmington,  Delaware, 
in  Record  A,  Vol.  i,  Page  108. 


APPENDIX. 


UNITED  STATES  STAMP  TAXES. 

Including  the  general  provisions  and  the  taxes  particularly  applying 
to  corporations  under  the  war  revenue  act  of  June  13,  1898. 

ADHESIVE  STAMPS. 

Section  6.  That  on  and  after  the  first  day  of  July,  eighteen  hundred 
and  ninety-eight,  there  shall  be  levied,  collected,  and  paid,  for  and  in 
respect  of  the  several  bonds,  debentures,  or  certificates  of  stock  and  of 
indebtedness,  and  other  documents,  instruments,  matters,  and  things 
mentioned  and  described  in  Schedule  A  of  this  act,  or  for  or  in  respect 
of  the  vellum,  parchment,  or  paper  upon  vi'hich  such  instruments,  matters, 
or  things,  or  any  of  them,  shall  be  written  or  printed  by  any  person  or 
persons,  or  party  who  shall  make,  sign,  or  issue  the  same,  or  for  whose 
use  or  benefit  the  same  shall  be  made,  signed,  or  issued,  the  several  taxes 
or  sums  of  money  set  down  in  figures  against  the  same,  respectively,  or 
otherwise  specified  or  set  forth  in  the  said  schedule.  .  .  . 

Section  7.  That  if  any  person  or  persons  shall  make,  sign,  or  issue,  or 
cause  to  be  made,  signed,  or  issued,  any  instrument,  document,  or  paper 
of  any  kind  or  description  whatsoever,  without  the  same  being  duly 
stamped  for  denoting  the  tax  hereby  imposed  thereon,  or  without  having 
thereupon  an  adhesive  stamp  to  denote  said  tax,  such  person  or  persons 
shall  be  deemed  guilty  of  a  misdemeanor,  and  upon  conviction  thereof 
shall  pay  a  fine  of  not  more  than  one  hundred  dollars,  at  the  discretion 
of  the  court,  and  such  instrument,  document,  or  paper,  as  aforesaid,  shall 
not  be  competent  evidence  in  any  court. 

Section  9.  That  in  any  and  all  cases  where  an  adhesive  stamp  shall  be 
used  for  denoting  any  tax  imposed  by  this  act,  except  as  hereinafter  pro- 
vided, the  person  using  or  affixing  the  same  shall  write  or  stamp  there- 
upon the  initials  of  his  name  and  the  date  upon  which  the  same  shall  be 
attached  or  used,  so  that  the  same  may  not  again  be  used.  And  if  any 
person  shall  fraudulently  make  use  of  an  adhesive  stamp  to  denote  any 
tax  imposed  by  this  act  without  so  effectually  canceling  and  obliterating 
such  stamp,  except  as  before  mentioned,  he,  she,  or  they  shall  be  deemed 
guilty  of  a  misdemeanor,  and  upon  conviction  thereof  shall  pay  a  fine 
of  not  less  than  fifty  nor  more  than  five  hundred  dollars,  or  be  imprisoned 
not  more  than  six  months,  or  both,  at  the  discretion  of  the  court.  .  .  . 
15  225 


226  APPENDIX. 

Section  13.  That  any  person  or  persons  who  shall  register,  issue,  sell, 
or  transfer,  or  who  shall  cause  to  be  issued,  registered,  sold,  or  transferred, 
any  instrument,  document,  or  paper  of  any  kind  or  description  whatso- 
ever, mentioned  in  Schedule  A  of  this  act,  without  the  same  being  duly 
stamped,  or  having  thereupon  an  adhesive  stamp  for  denoting  the  tax 
chargeable  thereon,  and  canceled  in  the  manner  required  by  law,  with 
intent  to  evade  the  provisions  of  this  act,  shall  be  deemed  guilty  of  a  mis- 
demeanor, and  upon  conviction  thereof  shall  be  punished  by  a  fane  not 
exceeding  fifty  dollars,  or  by  imprisonment  not  exceeding  six  months, 
or  both,  in  the  discretion  of  the  court;  and  such  instrument,  document, 
or  paper,  not  being  stamped  according  to  law,  shall  be  deemed  invalid 
and  of  no  effect.  .  .  . 

Section  14.  That  hereafter  no  instrument,  paper,  or  document  required 
by  law  to  be  stamped,  which  has  been  signed  or  issued  without  being  duly 
stamped,  or  with  a  deficient  stamp,  nor  any  copy  thereof,  shall  be  re- 
corded or  admitted,  or  used  as  evidence  in  any  court  until  a  legal  stamp 
or  stamps,  denoting  the  amount  of  tax,  shall  have  been  affixed  thereto,  as 
prescribed  by  law:  Provided,  That  any  bond,  debenture,  certificate  of 
stock,  or  certificate  of  indebtedness  issued  in  any  foreign  country  shall 
pay  the  same  tax  as  is  required  by  law  on  similar  instruments  when  issued, 
sold,  or  transferred  in  the  United  States;  and  the  party  to  whom  the  same 
is  issued,  or  by  whom  it  is  sold  or  transferred,  shall,  before  selling  or 
transferring  the  same,  affix  thereon  the  stamp  or  stamps  indicating  the 
tax  required. 

Section  15.  That  it  shall  not  be  lawful  to  record  or  register  any  instru- 
ment, paper,  or  document  required  by  law  to  be  stamped  unless  a  stamp 
or  stamps  of  the  proper  amount  shall  have  been  affixed  and  canceled  in 
the  manner  prescribed  by  law;  and  the  record,  registry,  or  transfer  of  any 
such  instruments  upon  which  the  proper  stamp  or  stamps  aforesaid  shall 
not  have  been  affixed  and  canceled  as  aforesaid  shall  not  be  used  in  evi- 
dence. 

Section  16.  That  no  instrument,  paper,  or  document  required  by  law 
to  be  stamped  shall  be  deemed  or  held  invalid  and  of  no  effect  for  the 
want  of  a  particular  kind  or  description  of  stamp  designated  for  and  de- 
noting the  tax  charged  on  any  such  instrument,  paper,  or  document, 
provided  a  legal  documentary  stamp  or  stamps  denoting  a  tax  of  equal 
amount  shall  have  been  duly  affixed  and  used  thereon. 


STAMP    TAXES    PARTICULARLY    APPLYING    TO    CORPORATIONS    UNDER 

SCHEDULE  A. 

Bonds,  debentures,  or  certificates  of  indebtedness  issued  after  the 
first  day  of  July,  Anno  Domini  eighteen  hundred  and  ninety- 
eight,  by  any  association,  company,  or  corporation,  on  each  hun- 
dred dollars  of  face  value  or  fraction  thereof. $0  05 


I 


APPENDIX.  227 

And  on  each  original  issue,  whether  on  organization  or  reor- 
ganization, of  certificates  of  stock  by  any  such  association, 
company,  or  corporation,  on  each  hundred  dollars  of  face  value 
or  fraction  thereof,   05 

And  on  all  sales,  or  agreements  to  sell,  or  memoranda  of  sales 
or  deliveries  or  transfers  of  shares  or  certificates  of  stock  in 
any  association,  company,  or  corporation,  whether  made  upon 
or  shown  by  the  books  of  the  association,  company,  or  corpora- 
tion, or  by  any  assignment  in  blank,  or  by  any  delivery,  or  by 
any  paper  or  agreement  or  memorandum  or  other  evidence  of 
transfer  or  sale  whether  entitling  the  holder  in  any  manner  to 
the  benefit  of  such  stock,  or  to  secure  the  future  payment  of 
money  or  for  the  future  transfer  of  any  stock,  on  each  hundred 
dollars  of  face  value  or  fraction  thereof,   02 

Provided,  That  in  case  of  sale  where  the  evidence  of  transfer  is 
shown  only  by  the  books  of  the  company  the  stamp  shall  be 
placed  upon  such  books;  and  where  the  change  of  ownership 
is  by  transfer  certificate  the  stamp  shall  be  placed  upon  the 
certificate;  and  in  cases  of  an  agreement  to  sell  or  where  the 
transfer  is  by  delivery  of  the  certificate  assigned  in  blank  there 
shall  be  made  and  delivered  by  the  seller  to  the  buyer  a  bill  or 
memorandum  of  such  sale,  to  which  the  stamp  shall  be 
affixed;  and  every  bill  or  memorandum  of  sale  or  agreement 
to  sell  before  mentioned  shall  show  the  date  thereof,  the 
name  of  the  seller,  the  amount  of  the  sale,  and  the  matter 
or  thing  to  which  it  refers.  And  any  person  or  persons  liable 
to  pay  the  tax  as  herein  provided,  or  any  one  who  acts  in  the 
matter  as  agent  or  broker  for  such  person  or  persons,  who  shall 
make  any  such  sale,  or  who  shall  in  pursuance  of  any  such 
sale  deliver  any  such  stock,  or  evidence  of  the  sale  of  any  such 
stock  or  bill  or  memorandum  thereof,  as  herein  required,  with- 
out having  the  proper  stamps  affixed  thereto,  with  intent  to 
evade  the  foregoing  provisions  shall  be  deemed  guilty  of  a 
misdemeanor,  and  upon  conviction  thereof  shall  pay  a  fine  of 
not  less  than  five  hundred  nor  more  than  one  thousand  dollars, 
or  be  imprisoned  not  more  than  six  months,  or  both,  at  the  dis- 
cretion of  the  court. 

Upon  each  sale,  agreement  of  sale,  or  agreement  to  sell,  any 
products  or  merchandise  at  any  exchange,  or  board  of  trade,  or 
other  similar  place,  either  for  present  or  future  delivery,  for 
each  one  hundred  dollars  in  value  of  said  sale  or  agreement  of  sale 
or  agreement  to  sell,  '"^ 

And  for  each  additional  one  hundred  dollars  or  fractional  part 
thereof  in  excess  of  one  hundred  dollars,  01 


228  APPENDIX. 

Provided,  That  on  every  sale  or  agreement  of  sale  or  agreement 
to  sell  as  aforesaid  there  shall  be  made  and  delivered  by  the  seller 
to  the  buyer  a  bill,  memorandum,  agreement,  or  other  evidence 
of  such  sale,  agreement  of  sale,  or  agreement  to  sell,  to  which 
there  shall  be  affixed  a  lawful  stamp  or  stamps  in  value  equal 
to  the  amount  of  the  tax  on  such  sale.  And  every  such,  bill, 
memorandum,  or  other  evidence  of  sale  or  agreement  to  sell 
shall  show  the  date  thereof,  the  name  of  the  seller,  the 
amount  of  the  sale,  and  the  matter  or  thing  to  which  it  refers; 
and  any  person  or  persons,  liable  to  pay  the  tax  as  herein 
provided,  or  any  one  who  acts  in  the  matter  as  agent  or  broker 
(or  such  person  or  persons,  who  shall  make  any  such  sale  or 
agreement  of  sale,  or  agreement  to  sell,  or  who  shall,  in  pursu- 
ance of  any  such  sale,  agreement  of  sale,  or  agreement  to  sell, 
deliver  any  such  products  or  merchandise  without  a  bill,  mem- 
randum  or  other  evidence  thereof  as  herein  required,  or  who 
shall  deliver  such  bill,  memorandum,  or  other  evidence  of  sale, 
or  agreement  to  sell,  without  having  the  proper  stamps 
affixed  thereto,  with  intent  to  evade  the  foregoing  provisions. 
shall  be  deemed  guilty  of  a  raisdemeanor,  and  upon  con- 
viction thereof  shall  pay  a  fine  of  not  less  than  five  hundred 
nor  more  than  one  thousand  dollars,  or  be  imprisoned  not 
more  than  six  months,  or  both,  at  the  discretion  of  the  court. 

Bank  check,  draft,  or  certificate  of  deposit  not  drawing  interest, 
or  order  for  the  payment  of  any  sum  of  money,  drawn  upon  or 
issued  by  any  bank,  trust  company,  or  any  person  or  persons, 
companies,  or  corporations  at  sight  or  on  demand 02 

Bills  of  lading  or  receipt  (other  than  charter  party)  for  any 
goods,  merchandise,  or  effects,  to  be  exported  from  a  port  or 
place  in  the  United  States  to  any  foreign  port  or  place,  10 

Bond:  For  indemnifying  any  person  or  persons,  firm,  or  corpo- 
ration who  shall  have  become  bound  or  engaged  as  surety  for 
the  payment  of  any  sum  of  money,  or  for  the  due  execution 
or  performance  of  the  duties  of  any  office  or  position,  and  to 
account  for  money  received  by  virtue  thereof,  and  all  other 
bonds  of  any  description,  except  such  as  may  be  required  in 
legal  proceedings  not  otherwise  provided  for  in  this  schedule..  . .  50 

Certificate  of  profits,  or  any  certificate  or  memorandum  showing 
an  interest  in  the  property  or  accumulations  of  any  association, 
company,  or  corporation,  and  on  all  transfers  thereof,  on  each 
one  hundred  dollars  of  face  value  or  fraction  thereof,  02 

Certificate    of   any    description    required    by    law    not    otherwise 

specified  in  this  act 10 


APPENDIX.  229 

Conveyance:  Deed,  instrument,  or  writing,  whereby  any  lands, 
tenements  or  other  realty  sold  shall  be  granted,  assigned,  trans- 
ferred, or  otherwise  conveyed  to,  or  vested  in,  the  purchaser  or 
purchasers,  or  any  other  person  or  persons,  by  his,  her,  or  their 
direction,  when  the  consideration  or  value  exceeds  one  hundred 
dollars  and  does  not  exceed  five  hundred  dollars,  50 

And  for  each  additional  five  hundred  dollars  or  fractional  part  thereof 

in  excess  of  five  hundred  dollars,  50 

Lease,  agreement,  memorandum,  or  contract  for  the  hire,  use, 
or  rent  of  any  land,  tenement,  or  portion  thereof — 

If  for  a  period  of  time  not  exceeding  one  year,  25 

If  for  a  period  of  time  exceeding  one  year  and  not  exceeding  three 
years 50 

If  for  a  period  exceeding  three  years,  i  00 

Mortgage  or  pledge,  of  lands,  estate  or  property,  real  or  personal, 
heritable,  or  movable,  whatsoever,  where  the  same  shall  be  made 
as  a  security,  for  th.e  payment  of  any  definite  and  certain  sum 
of  money,  lent  at  the  time  or  previously  due  and  owing  or  for- 
borne to  be  paid,  being  payable;  also  any  conveyance  of  any 
lands,  estate,  or  property,  whatsoever,  in  trust  to  be  sold  or 
otherwise  converted  into  money,  which  shall  be  intended  only  as 
security,  either  by  express  stipulation  or  otherwise;  on  any  of 
the  foregoing  exceeding  one  thousand  dollars  and  not  exceeding 
one  thousand  five  hundred  dollars,  25 

And  on  each  five  hundred  dollars  or  fractional  part  thereof  in  excess 

of  fifteen  hundred  dollars,  25 

Provided.  That  upon  each  and  every  assignment  or  transfer  of  a 
mortgage,  lease,  or  policy  of  insurance,  or  the  renewal  or  con- 
tinuance of  any  agreement,  contract,  or  charter,  by  letter  or 
otherwise,  a  stamp  duty  shall  be  required  and  paid  at  the  same 
rate  as  that  imposed  on  the  original  instrument. 

Povi'er  of  attorney  or  proxy  for  voting  at  any  election  for 
officers  of  any  incorporated  company  or  associations,  except 
religious,  charitable,  or  literary  societies,  or  public  cemeteries,..  .  10 

Power  of  attorney  to  sell  and  convey  real  estate,  or  to  rent  or 
lease  the  same,  to  receive  or  collect  rent,  to  sell  or  transfer  any 
stock,  bonds,  scrip,  or  for  the  collection  of  any  dividends  or  in- 
terest thereon,  or  to  perform  any  and  all  other  acts  not  herein- 
before   specified,    25 


230  APPENDIX. 


THE    COMMISSIONER    OF    INTERNAL    REVENUE    HAS    MADE    THE    FOLLOWING 

RULINGS. 

The  nominal  face  value  of  the  certificate  as  a  whole  is  the  basis  upon 
which  the  tax  is  computed  without  regard  to  the  par  value  of  each  share 
or  the  amount  that  has  been  paid  into  the  treasury  of  the  company  on 
such  share. 

A  power  of  attorney  on  the  back  of  a  certificate  of  stock  requires  a 
twenty-five  cent  stamp  as  a  power  of  attorney  in  addition  to  the  tax  on  the 
transfer  at  the  rate  of  two  cents  per  one  hundred  dollars. 

Where  a  stockholder  merely  surrenders  his  certificate  and  takes  a  num- 
ber of  certificates  therefor  in  his  own  name,  there  is  no  transfer  and  no 
stamp  is  required. 

Where  stock  is  pledged  as  collateral  for  a  loan,  the  tax  is  to  be  recov- 
ered on  the  amount  of  money  loaned  above  $1,000,  and  not  on  the  face 
value  of  the  certificate  or  securities. 

The  stamp  should  be  af^xed  to  the  note  accompanying  the  pledge,  and 
the  note  should  also  be  stamped  as  a  note. 

The  acknowledgment  to  a  certificate  of  incorporation  requires  a  ten- 
cent  stamp. 

Power  of  attorney  authorizing  proxy  to  do  other  business  than  vote  for 
elections  of  officers,  requires  a  twenty-five  cent  stamp  the  same  as  a  gen- 
eral power  bf  attorney. 

W^hen  several  stockholders  join  in  executing  one  proxy  one  stamp  is 
sufficient. 

(NoTB. — In  placing  stamps  on  stock  certificates  all  original  certificates  should  have  the 
stamp  placed  upon  the  face  thereof.  In  other  cases  the  stamp  should  be  placed  on  the  back  of  the 
old  certificate  or  the  memorandum  of  sale  or  on  the  transfer  book,  where  required.) 


INDEX. 


ABATEMENT,  actions  not  to  abate  upon  dissolution,     59. 
ACCEPTANCE  of  constitution,     2. 

of  charter,    26. 
ACCOMMODATION  NOTES,  implied  power  to  make,  12,  13. 
ACKNOWLEDGMENT  of  certificate,    24,  25. 

form  of,     202. 
ACTIONS,  on  stock  subscription,     31. 

against  corporations  after  dissolution,     56. 

by  and  against  trustees  upon  dissolution,     56. 

service  of  process,    60. 

not  to  abate  upon  dissolution.     59. 

to  enforce  liability  of  officers  and  stockholders,     61. 

receiver  to  be  made  party  to,    65. 

against  consolidating  corporation,     70. 

to  recover  taxes  due  to  the  state,     140. 

want  of  legal  organization,  no  defence  in,     "/Z. 

by  officers  or  stockholders  against  corporation  for  debts  paid,     61. 
ADVERTISEMENT.     See  Notice. 

of  first  meeting,     46. 
ADVERTISING  COMPANIES,  forms  for,     176. 

AFFIDAVIT,  in  support  of  surrender  of  charter  before  beginning  busi- 
ness,    59. 
AGENCY,  evidence  of,    45. 
AGENT,  in  charge  of  principal  office,  form  for,    203. 

appointment  of,  need  not  be  under  seal,     8. 

corporations  liable  for  torts  of,     6. 

appointment  of,  by  foreign  corporations,    2. 

power  to  appoint,     5,  8. 

method  of  appointing,     45. 

liability  of  company  for  acts  of,     45. 

who  may  be  the  resident  agent,     35. 

evidence  as  to  power  of  agent,     8. 
AMENDED    CERTIFICATE    OF    INCORPORATION     BEFORE 

PAYMENT  OF  CAPITAL  STOCK,  forms  for,    202. 
AMENDMENT,  increase  of  stock  by  amendment  to  certificate,     49. 

of  certificate,    25. 

231 


232  INDEX. 

AMENDMENT— Continued. 

of  pre-existing  corporations,     133. 

of  certificate  after  organization,     126. 

of  certificate  before  payment  of  capital  stock,     125. 

of  general  corporation  act,  14. 

not  to  impair  remedies,     14. 

of  charters  existing  at  time  of  adoption  of  constitution,    2. 

not  to  be  by  special  act,     i. 

ANNUAL  REPORT  to  stockholders  of  railroad  companies,    96. 
ANNUAL  FRANCHISE  TAXES,  parlor,  palace  or  sleeping  car  com- 
panies, on  the  gross  amount  of  its  receipts  for  fare  or  tolls  for  trans- 
portation  of  passengers   within  the   state,   annually  returned  to,   or 
ascertained  by,  the  secretary  of  state,  i  1-2  per  cent.,     xx. 

all  other  companies,  on  capital  stock  issued  and  outstanding  up  to 
and  including  $3,000,000,  1-20  of  i  per  cent.,     xx. 

on  amount  of  capital  stock  issued  and  outstanding  in  excess  of 
$3,000,000  and  not  exceeding  $5,000,000,  1-40  of  i  per  cent.,     xx. 

on  each  $1,000,000  of  capital  stock  issued  and  outstanding  in  excess 

of  $5,000,000,  $30.00,       XX. 

telegraph,  telephone,  cable  and  express  companies,  on  gross 
amount  of  receipts  from  business  done  in  this  state,  annually  returned 
to,  or  ascertained  by,  the  secretary  of  state,  i  per  cent.,     xx. 

companies  for  the  distribution  of  electricity,  heat  or  power,  or 
for  the  production,  distribution  or  sale  of  gas,  on  the  gross  amount 
of  receipts  from  business  done  in  this  state,  annually  returned  to, 
or  ascertained  by,  the  secretary  of  state,  2-5  of  i  per  cent.,     xx. 

and  upon  the  dividends  in  excess  of  4  per  centum  so  paid  or  de- 
clared by  any  such  corporation,  4  per  cent.,     xx. 

oil  or  pipe  line  companies,  on  the  gross  amount  of  its  receipts 
from  business  done  in  this  state,  annually  returned  to,  or  ascertained 
by,  the  secretary  of  state,  3-5  of  i  per  cent.,     xx. 

insurance  companies  (other  than  life),  on  the  gross  amount  of 
premiums  received  by  it  upon  the  lives  of  persons  resident  or  prop- 
erty located  within  this  state,  annually  returned  to,  or  ascertained  by, 
the  secretary  of  state,  3-4  of  i  per  cent.,     xx. 

life  insurance  companies,  on  surplus,  3-4  of  i  per  cent.  And  on 
total  gross  insurance  premiums  collected,  3-10  of  i  per  cent.,     xx. 

AIR  BRAKE  to  be  used  on  certain  trains,     98. 

ALTERATION  OF  BY-LAWS,  forms  for.     190. 

APPEAL  from  tax  assessment,     144. 

adjustment  of  claims  by  receivers  and  trustees,     64. 

APPROPRIATIONS,  regulation  of,  in  case  of  corporations,     i. 
ARBITRATION  to  determine  value  of  stock  of  dissatisfied  stockholder 
on  consolidation,     69. 

ARTICLES  OF  ASSOCL\TION  of  railroad  companies,    81. 


INDEX.  233 

ASSAULT  AND  BATTERY,  corporation  may  be  sued  for,    6. 

ASSESSMENTS,  failure  to  pay,     27. 

of  damages  by  railroad  companies,     86. 
review  of  tax  assessment,     144. 
of  stock,    49. 
collection  of,     51. 

ASSIGNMENT  FOR  CREDITORS,  by  director  vacates  his  office,     42. 

ATTACHMENTS,  corporations  are  subject  to,     122. 

ATTORNEY-GENERAL,  proceedings  by,  to  revoke  charter,     2. 
proceedings  by,  to  recover  corporate  tax,     139. 

AUTOMOBILE  COMPANIES,  forms  for,     176. 

BADGE  of  railroad  conductors,    95. 

BANKS  may  be  chartered  by  special  act,     2. 
what  constitutes  property  of,     14. 

BANKING  POWERS,  restriction  on,     13. 

BEQUEST  of  stock  to  corporation,     30. 

corporations  may  take  property  bequeathed,     5. 

BICYCLE  COMPANIES,  forms  for,     175. 

BILLS,  power  to  discount  denied,     13. 
implied  power  to  make,     12. 

BOOKKEEPER,  lien  of,  for  wages,    66. 

BOOKS  AND  ACCOUNTS,  forms  for,     190. 

BOOKS,  stock  ledger  as  evidence,     2>2i- 

stock  transfer  books  to  be  kept,     ^i- 
corporation  books  as  evidence,     2i2)- 
minutes  as  evidence,     34. 

restrictions  on  stockholders  as  to  right  to  examine,     22. 
stock  books  must  be  kept  in  principal  office  in  Delaware,     35. 
either  original  or  duplicate  stock  books  may  be  kept  in  principal 
office  in  Delaware,     36. 

limitation  upon  right  to  examine  books,     36. 
right  to  examine  books  of  foreign  corporation,     2>7- 
right  of  stockholder  to  examine,     36,  37. 
as  evidence  of  ownership  of  stock,    46. 

BONDS,  stamp  tax  on,     226-228. 

of  officers  of  corporation,     43. 

to  secure  corporation  in  issuing  new  certificates  of  stock  for  lost 
certificates,     74. 

may  be  issued  by  consolidated  corporation,     70. 

when  municipalities  may  not  issue  bonds  in  favor  of  corpora- 
tions,    I. 

BONUS  by  banks,     14. 


234  INDEX. 

BORROWING  MONEY,  implied  power  as  to,     12. 
power  of  railroad  companies,  as  to,     93. 
by  railway  corporations,     117. 

BREWING  COMPANIES,  forms  for,     158. 

BRIDGES,  construction  of,  by  railroad  companies,     90. 
constructing  bridges  is  manufacturing,     147. 
construction  of,  by  railway  corporations,     113. 

BUILDING  MATERIAL  COMPANIES,  forms  for,     164. 

BUILDING  AND  LOAN  ASSOCIATIONS,  incorporation  of,  under 
act  of  1883,     10. 

may  sell  accumulated  funds  at  a  premium,     81. 

BULLION,  power  to  buy,  denied,     13. 

BUSINESS,  failure  to  commence,     10. 

surrender  of  charter  before  beginning,     58. 

must  be  stated  in  certificate,     16,  18. 

where  business  may  be  conducted,     15. 

change  of  nature  of,     126. 

forfeiture  of  charter,  for  failure  to  commence,     72. 

BY-LAWS,  power  to  make,     5,  9. 
must  be  reasonable,     9. 
must  be  consistent  with  law,     5. 
limitations  as  to  penalties,     5. 
provisions  as  to  stock  transfers,     31. 
power  to  make  and  alter,     22. 

when  by-law  is  part  of  agreement  to  subscribe  to  stock,    9. 
waiver  of  protection  of,     40. 
are  evidence  against  officers  of  company,     45. 
when  courts  will  not  presume  a  by-law,     47. 

may  provide  that  oaths  shall  be  taken  by  officers  and  agents.     45. 
regulations  as  to  appointment  of  agents,     45. 
by  whom  made,     47. 
alteration  or  repeal  of,     47. 

regulation  as  to  filling  vacancies  in  offices,     45. 
may  provide  for  an  office  outside  of  the  state,     128. 

CABLE.     See  Railways. 

CABLE  COMPANY,  taxation  of,     134- 

CALLS,  on  stock,      27,  28,  31. 
definition  of,     28. 

CAPITAL  STOCK.     See  Stock. 

CARS,  lighting  of  railroad  cars,     98. 

CATTLE  GUARDS,  construction  of,  by  railroad  companies,     94- 

CEMENT  COMPANIES,  forms  for,     175. 


INDEX, 


235 


CERTIFICATE,  contents  of,    3,  16. 

name,     16. 

office,     16. 

business,     16. 

capital  stock,     16. 

incorporators,     17. 

existence,     17. 

officers,     17. 

property,     17. 

indebtedness,     17. 

liability  of  stockholders,     17. 

when  certificate  is  evidence,     24. 

under  general  act  is  charter  of  the  company,     11. 

powers  defined  in,     21. 

amendments  of,     25. 

provision  limiting  right  to  examine  books,     36. 

of  dissolution,     54. 

of  surrender  of  charter,     59. 

of  payment  of  stock.     52. 

increase  of  stock  by  amendment  to,     49. 

fees  on  filing,     121. 

of  renewal  and  extension  of  corporate  existence,     123,  124. 

amendment  of,  after  organization,     126. 

amendment  of,  for  payment  of  capital  stock,     126. 

of  organization  of  railroad  company,     81. 

of  stock  substituted  for  lost  certificate,     74. 

authentication  and  record  of,     24. 
CERTIFICATE  OF  DISSOLUTION  BY  UNANIMOUS  CONSENT 

OF  ALL  THE  STOCKHOLDERS,  forms  for,     198. 
CERTIFICATE  OF  THE  SURRENDER  OF  CORPORATE  FRAN- 
CHISES, forms  for,     197. 
CERTIFICATE  OF  CHANGE,  forms  for,     200. 
CERTIFICATE  OF  STOCK,  transfer  of,     31. 

notice  on  face  of,     32. 
CHANCELLOR    may    appoint    trustees    and    receivers    after    dissolu- 
tion,   56. 
CHARITABLE  CORPORATIONS  not  to  pay  state  fees,     121. 

may  be  created  by  special  act,     2. 
CHARTER.     See  Certificate. 

certificate  under  general  act  is  charter  of  the  company,     11. 

acceptance  of,  26. 

amendments  of,     14. 

not  to  be  amended,  renewed  or  revived  by  special  act,     i. 

forfeiture  of,  for  failure  to  commence  business,     72. 

void  by  failure  to  pay  taxes,     141. 

surrender  of,     58. 


2;^6  INDEX. 

CHARTER— Continued. 

penalty  for  acting  under  void  charter,     141. 

restoration  of.  after  forfeiture  for  non-payment  of  taxes,     143. 

CLAIMS,  proof  of,  against  corporation  after  dissolution,     63. 
adjustment  of,     63. 

CLASSIFICATION  of  directors,     40. 

CLASSIFICATION  OF  DIRECTORS,  forms  for,     182, 

CHECKS  FOR  MONEY,  forms  for,     190. 

CHEMICAL  COMPANIES,  forms  for,     164. 

CITY.     See  Municipalities. 

COLLATERAL  ATTACK  on  charter.     73. 
on  corporate  existence,     26. 

COMMON  SEAL.     See  Seal. 

COMMISSIONERS  to  report  upon  drainage  improvements,     77. 
COMMISSIONER    OF    DEEDS,    acknowledgment    of    certificate    be- 
fore.    25. 
COMMON  AND  PREFERRED  STOCK,  forms  for.     180. 
COMMON  STOCK.     Same  as  "general  stock,"     129. 
COMPENSATION  of  receivers,    67. 

COMPENSATION  OF  DIRECTORS,  forms  of  by-laws  for.     186. 
CONDEMNATION  PROCEEDINGS  by  railroad  companies.    86. 

by  railway  companies,     no. 
CONDUCTORS'  badge  to  be  worn  by  railroad  conductors,     95. 
CONDUITS,  for  wires,     102. 

CONSENT,  written  consent  of  stockholders  to  dissolve,     55. 
CONSOLIDATION  of  corporations,    67. 

action  against  consolidating  corporation,     70. 

liability  of  corporations  consolidating,     70. 

authority  of  consolidated  corporation  to  issue  bonds  and  stock,     70. 

payment  for  stock  of  dissatisfied  stockholders,     69. 

companies  engaged  in  the  same  general  line  of  business  may  con- 
solidate,    68. 

companies  having  the  same  directors  may  consolidate,     68. 

nature  of  consolidated  corporations,     68. 
CONSTITUTION,  provisions  of,  relating  to  corporations,     i. 
CONSTITUTIONAL  LAW  impairing  obligation  of  contract,     15. 
CONTRACTS  AND  AGREEMENTS,  forms  for,     189. 
CONTRACT,  impairing  obligation  of,     14,  15. 

suit  on  implied  contract,     6. 

power  to  make,     13. 

between  state  and  corporations  as  to  taxation.     14. 

proper  form  of  corporate  signature,     44. 


INDEX.  237 

CONTRACT— Coutinued. 

restraint  on  alienation  of  stock,     32. 

by  de  facto  officers,     44. 

executed  by  committee  of  directors,     45. 

what  constitutes  the  contract  of  stock  subscription,     50. 

for  consolidation  of  two  corporations,     67. 
CONTRACTOR  not  entitled  to  lien  for  services,     66. 
CORDAGE  COMPANIES,  forms  for,     165. 
CORPORATIONS.     See  Name;  Foreign  Corporations. 

definition  of,     3. 

method  of  incorporating,     3. 

constitutional  provisions  relating  to,     i. 

not  to  be  created  by  special  act,     i. 

powers  of,     4. 

taxation  of,     134. 

renewal  and  extension  of  corporate  existence,     123. 

drainage  companies,     91. 

building  and  loan  associations,     81. 

railroad  companies,    81. 

steam,  heat  and  power  companies,     100. 

electrical  companies,     102. 

gas  and  water  companies,     103. 

telegraph  and  telephone  companies,     105. 

street  railway  companies,     106. 

consolidation,     67. 

dissolution  of,     54,  60. 

service  of  legal  process  on,     60. 

collateral  attack  on  existence  of,     26. 

when  corporate  existence  begins,     26. 

status  of  de  facto  corporations,     26. 
CREDITORS'    proof    of    claims    against    corporation    in    hands    of    re- 
ceivers,   63. 
CROSSINGS,  of  railways,     115. 

construction  of,  by  railroad  companies,     92. 

COTTON  COMPANIES,  forms  for,     166. 

COUNTY.     See  Municipalities. 

COUNSEL,  form  of  by-laws  for,     188. 

CONSUL,  acknowledgment  of  certificate  before,    25. 

CUMULATION  on  dividends  on  preferred  stock,     129. 

CUMULATIVE  VOTING,  power  as  to,    22,  24. 

DAMAGES,  assessment  of,  by  railroad  companies,     86. 

DEBT.     See  Indebtedness;  Mortgage. 

tax  on  corporations  shall  be  a  debt  due  to  the  state,     139. 

DEEDS,  stamp  tax  on,     229. 


238  INDEX. 

DE  FACTO  CORPORATIONS,  status  of,     26. 

DE  FACTO  OFFICERS,  contracts  by,    44. 

DEFINITION  of  corporations,     3. 

DEFENCE,  want  of  legal  organization,  no  defence  in  actions,     7^. 

DELINQUENT  STOCKHOLDERS.     See  Stockholders,    31,  32. 

DELIVERY  OF  STOCK,    32. 

DEPOSITS,  power  to  receive,  denied,     13. 

DERELICTION,  penalty  for  dereliction  of  officers,     53. 

DEVISE,  corporations  may  take  property  devised,     5. 

DIRECTORS,  number  and  election  of,     2,  39. 

synonymous  with  managers,     120. 

term  of  office,     39. 

to  be  voted  for  by  ballot.     39. 

to  be  elected  at  annual  meeting,     39. 

may  be  divided  into  classes,     40. 

powers  of,     20,  40,  41. 

must  act  as  a  board,     40. 

cannot  vote  at  board  meetings  by  proxy,     40. 

majority  constitutes  quorum,     40. 

may  select  an  executive  committee,     40. 

may  become  creditors  of  the  corporation,     40. 

status  of  two  corporations  dealing  with  each  other,     41. 

cannot  speculate  with  company's  money,     42. 

are  not  vested  with  title  to  corporate  property,     42. 

cannot  use  knowledge  acquired  as  a  director  to  the  disadvantage 
of  the  company,     42. 

directors  making  an  assignment  for  creditors  lose  their  office,     42. 

person  nominated  and  elected  as  director  does  not  become  so  until 
he  accepts,     42. 

classification  of,     22. 

power  of,  to  sell  and  mortgage  property,     22. 

of  railway  corporations,     109. 

of  railroad  companies,     85. 

powers  of,  as  to  consolidation,     67. 

power  of,  to  make  assessment  upon  stock,    49. 

when  directors  may  make  by-laws,     47. 

power  of,  to  declare  dividends,     sj. 

liability  of,  for  declaring  illegal  dividends.     s~. 

liability  of,  for  false  statement  of  the  afifairs  of  the  company,     38. 

secondary  liability  of,     62. 

liability  of,  for  conducting  unauthorized  business.     18. 

discretion  of,  as  to  contracts,     13. 

companies  having  the  same  directors  may  consolidate.    68. 

may  hold  their  meetings  outside  of  the  state,     128. 

meeting  of,  to  dissolve,     54. 


INDEX.  239 

DIRECTORS— Cow;mMf(i. 

appointment  of  agents  by.     45. 

service  of  process  upon,     60. 

vacancy  in  office  of,     45. 

vacancy  in  board,  to  be  filled  by  board,     40. 

remedy  of,  against  corporation  for  debts  paid,     61. 

valuation  of  property  by.  conclusive,     129. 

forms  of  by-laws  for,     185. 

DIRECTORS   TO    SELL    PROPERTY    ON    REQUEST    OF    MA- 
JORITY OF  STOCKHOLDERS,  forms  for,     183. 

DIRECTORS  TO  SELL  ALL  THE  PROPERTY,  forms  for,     181. 

DIRECTORS  TO  MAKE  BY-LAWS,  forms  for,     180. 

DIRECTORS  TO  REGULATE  EXAMINATION  OF  BOOKS,  forms 
for,     181. 

DIRECTORS  TO  HOLD  AND  KEEP  BOOKS  OUT  OF  STATE, 
forms  for,  in  by-laws,     182. 

DISCRIMINATION  IN  RAILROAD  CHARGES,    99- 
DISCOUNTING  BILLS,  power  denied,     13. 
DISSENT  of  directors  to  illegal  dividend,     27- 
DISSOLUTION,  method  of.     10. 

general  provisions  relating  to,     54. 

action  of  directors,     54. 

meeting  to  dissolve,     54. 

notice  of  adoption  of  resolution  to  dissolve,     54. 

advertisement  of  notice.     54. 

meeting  of  stockholders,     54. 

two-thirds  in  interest  of  stockholders  must  consent,     54. 

certificate  of  dissolution,     54. 

powers  of  officers  after  dissolution,     55. 

distribution  of  property  of  dissolved  company,     55. 

when  all  stockholders  agree  in  writing  to  dissolve,  no  meeting  or 
notice  is  necessary,     55. 

powers  of  trustees  upon  dissolution,     56. 

actions  by  and  against  trustees  after  dissolution,     56. 

liabilities  of  trustees  upon  dissolution,     56. 

continuance  of  corporation  after  dissolution,     56. 

corporation  as  party  to  suit  after  dissolution,     56. 

chancellor  may  appoint  trustees  and  receivers  after  dissolution,    56. 

powers  of  trustees  and  receivers  after  dissolution,     56. 

when  receiver  will  be  appointed,     57. 

jurisdiction  of  chancellor,     58. 

distribution  of  property  after  dissolution,     58. 

fee  on  filing  certificate  of,     121. 

proof  of  claims  against  corporation  after  dissolution,    63. 

surrender  of  charter  before  beginning  business,     58. 


240  INDEX. 

DISSOLVTIO'N— Continued. 

actions  not  to  abate  upon  dissolution,     59. 

filing  decree  of  dissolution,     59. 

failure  to  elect  officers  does  not  dissolve  corporation,     9,  45, 

where  property  goes  on,     20. 

transfer  of  all  property  does  not  work,     10. 

right  of  corporation  to  dissolve,     5,  9. 

DISTILLING  COMPANIES,  forms  for,     167. 

DITCHES.     See  Drainage. 

DIVIDENDS,  right  of  directors  to  declare,     37. 
to  whom  payable,     38. 
actions  for,     38. 
annual  report  of,     135. 
on  preferred  stock,     19,  129. 
preferences  as  to,     130. 

DOMICILE  of  corporation  for  purpose  of  taxation,     148. 

DRAINAGE,   method   of  estimating  damages   to  be  paid  by   drainage 
companies,     77. 

corporations  organized  for,     76. 
corporations  for,  under  act  of  1883,     10. 

DRY  GOODS  COMPANIES,  forms  for,     176. 

DUPLICATE  STOCK  BOOK,  where  books  may  be  kept,     36. 

DUTIES  OF  OFFICERS  MAY  BE  DELEGATED,  forms  for,     188. 

DUTIES  OF  THE  PRESIDENT,  forms  of  by-laws  for,     187. 

DYEING  COTTON  GOODS  is  manufacturing,     148. 

EDUCATIONAL  CORPORATION  not  to  pay  state  fees,     121. 
may  be  chartered  by  special  act,     2. 

ELECTIONS.     See  Voting. 

of  directors,    2,  49. 

by  stockholders,     S3- 

ELECTRIC  LIGHTING  COMPANIES,  forms  for,     171. 

ELECTRIC  LIGHT  COMPANIES,  forms  for,     159. 
taxation  of,     134. 

ELECTRICAL  MACHINERY  COMPANIES,     170. 

ELECTRIC  RAILWAY  LIGHTING  COMPANIES,  forms  for,     177. 

ELECTRIC  VEHICLE  COMPANIES,  forms  for,     172. 

ELECTRIC  COMPANIES,  forms  for,     168. 

ELECTRICITY,  companies  for  distributing,     102. 

railways  to  be  operated  by,     106. 
ELEVATOR  COMPANIES,  forms  for,     175. 
EMINENT  DOMAIN,  exercise  of,  by  railroad  company,     85. 

exercise  of,  by  railway  corporation,     no. 


INDEX.  241 

EMINENT  DOMAIN— Continued. 

method  of  estimating  damages  to  be  paid  by  drainage  com- 
panies.    /7. 

employe's  does  not  include  officers,     66. 
lien  of,     66. 

ENGINEERING  COMPANIES,  forms  for,     174. 

ESTOPPEL  to  deny  authority  of  de  facto  officers,    44. 

EVIDENCE,  charter  of  railroad  companies  as,     84. 
copies  of  articles  of  association  as,     121. 
as  to  powers  of  agent,    8. 
as  to  existence  of  corporation,     6. 
when  certificate  is,     24. 
corporate  books  as.     34. 
by-laws  are  evidence  against  officers.     45. 
of  agency,     45- 
as  to  power  to  affix  seal.     7. 
presumption  as  to  authority,     7. 

EXECUTION,  stock  is  subject  to,     122. 

EXECUTIVE  COMMITTEE,  forms  for,     184. 

EXEMPTION  from  taxation,     14. 

Railroads,  railways,  canals,  banking  corporations,  savings  banks, 
cemeteries,  religious,  charitable  or  educational  companies,  and  manu- 
facturing or  mining  companies,  fifty  per  centum  of  whose  capital  stock 
issued  and  outstanding  is  invested  in  manufacturing  and  mining  in 
this  state.  Manufacturing  and  mining  companies  not  having  said 
fifty  per  cent,  so  invested  but  having  a  part  of  capital  stock  so  in- 
vested are  entitled  to  deduction  of  value  of  real  and  personal  prop- 
erty used  in  manufacturing  and  mining  in  the  state,  from  amount  of 
capital  stock  issued  and  outstanding. 

Section  2  of  the  franchise  tax  law  provides  that  certain  corpora- 
tions (above  named)  shall  make  report  of  their  total  receipts  of 
business  done  in  this  state  and  section  4  requires  such  companies  to 
pay  to  the  state  treasurer  the  amount  of  franchise  tax  fixed  upon 
such  report. 

Any  such  company  operated  wholly  outside  of  this  state,  is  there- 
fore not  required  to  make  report  and  would  not  be  subject  to  a  fran- 
chise tax. 

EXPRESS  COMPANY,  taxation  of,     134. 

EXTENSION  of  corporate  existence,     123. 

FACTORS,  method  of  appointing,     45. 

FALSE  STATEMENT  by  directors  or  officers,    38. 

FARM  AND  DAIRY  PRODUCT  COMPANIES,  forms  for,     178. 

FARM  PRODUCT  COMPANIES,  forms  for,     I77- 
16 


242  INDEX. 

FEES  to  be  paid  to  state  by  railroad  companies.     100. 

to  state  on  filing  certificates.     121. 
on  filing  amendment  of  certificate  for  payment  of  capital  stock,     126. 

amended  certificate  of  incorporation  (other  than  those  authorizing 
the  increase  of  capital  stock,  $20.00),     xix. 

certificate  of  change  of  principal  ofifice,  $5.00.     xix. 

certificate  of  change  of  name,  $20.00,     xix. 

certificate  of  decrease  of  capital  stock,  .$20.00,     xix. 

certificate  of  increase  or  decrease  of  number  of  shares.  $20.00,     xix. 

certificate  of  dissolution,  $20.00.     xix. 

certificate  of  incorporation,  for  each  $1,000  of  the  total  stock  au- 
thorized (but  in  no  case  less  than  $20.00),     .15,     xix. 

certificate  of  increase  of  capital  stock,  for  each  $1,000  of  such  in- 
crease,    .15,     xix. 

certificate  of  consolidation  or  merger,  for  each  $1,000  of  capital 
stock  of  the  new  company,  over  and  above  the  total  capital  stock 
of  the  companies  so  consolidated  or  merged  (but  in  no  case  less 
than  $20.00),     .15,     xix. 

other  certificates,     $5.00,     xix. 

for  receiving,  filing  and  indexing  any  papers  required  by  law  to  be 
filed,  $2.00,     xix. 

for  certified  copies,  per  line,  .02,     xix. 

for  official  seal  on  certificate,  $1.00,     xix. 

for  recording  original  or  amended  certificate  of  incorporation  to 
the  recorder  of  deeds,  according  to  length,  about  $4.00,     xix. 

FENCES,  construction  of,  by  railroad  companies,     94. 

FIERI  FACIAS  for  collection  of  taxes,     142. 

FLAGMEN  to  be  employed  by  railroad  companies,     98. 

FLOUR  COMPANIES,  forms  for,     174. 

FORECLOSURE,  reorganization  in  foreclosure  proceedings,     "jz. 

FOREIGN  CORPORATION,  right  of  stockholders  to  examine  books 
of.     Zl. 

must  appoint  agents,     2. 

doing  business  in  Delaware.     149. 

when  exempt  from  taxation,     148. 

FOREIGN    FIRE    INSURANCE    COMPANY,    tax    upon    premiums 
of,     140. 

FOREIGN  PROPERTY,  rights  as  to,     15. 

FORFEITURE,  no  provision  for  forfeiture  for  misuser  or  non-user.     "j^. 
for  failure  to  pay  taxes,     141. 
of  charter  for  failure  to  commence  business,     72. 
of  stock  of  delinquent  subscriber,     51. 
of  charters,     2. 
for  failure  to  maintain  office,     35. 


INDEX.  243 

FORFEITURE— Confinued. 
of  stock,     27,  28. 
no  general  law  regulating.     9. 

FORMS  AND  PRECEDENTS.     151. 

BEFORE    ORGANIZATION.    Subscription    agreement    before    organiza- 
tion,    151. 

form  for  charter,     151. 

GENERAL  CLAUSES,  to  manufacture  or  sell  generally,     155. 

to  carry  on  other  business,     155. 

to  purchase  patents,     155. 

to  acquire  stock,  etc.,  in  other  companies,     155. 

to  acquire  other  business,     155. 

to  acquire  stock  in  similar  companies,     155. 

to  remunerate  for  services,     156. 

to  purchase  property,     156. 

to  construct  works,     156. 

to  act  as  trustees,  etc.,     156. 

to  adopt  promoter's  contract,     156. 

to  purchase,  hold,  etc.,  real  estate,     156. 

to  conduct  business  in  other  states,     156. 

to  control  and  manage  other  companies,     157. 

to  make  contracts,  etc..     157. 

to  construct  works,  etc.,     157. 

general  words,  157. 

SPECIAL  CLAUSES  FOR  PARTICULAR   OBJECTS. 

land  and  general  investment  companies,     158. 

brewing  companies,     158. 

hotel  companies,     159. 

manufacturing  companies,     159. 

electric  light  companies,     159. 

mining  companies,     160. 

printing  and  publishing  companies,     i6o. 

manufacturing  companies,     160. 

public  works,  161. 

to  purchase  and  work  patents,     161. 

securities  and  investments,     162. 

water  power,     162. 

building  contractors,     163. 

freight  agents,     163. 

typewriting  machines,     163. 

building  materials,     164. 

furniture,     164. 

typesetting  machines,     164. 

chemicals,     164. 

grain  elevator,     165. 

tobacco  company,     165. 

cordage,     165. 


244  INDEX. 

FORMS  AND  PRECEDENTS— Continued. 
iron,       i66. 
thread,     i66. 
cotton  company,     i66. 
leather,     i66. 
theatrical,     167. 
sugar,     167. 
distillers,     167. 
mercantile  agency,     167. 
stationers,  etc.,     168. 
electric,     168. 
newspapers,     169. 
smelters  and  refiners,     169. 
electrical  machinery,     170. 
newspaper  and  publishing,     170. 
shipping,     170. 
electric  lighting,     171. 
paper,     172. 
shipbuilding,     172. 
electric  vehicles,     172. 
pottery,     173. 
railway  cars,     173. 
engineering,     174. 
flour,     174. 
elevators,     175. 
cement,     175. 
bicycles,     175. 
dry  goods,     176. 
advertising,     176. 
automobiles,     176. 
electric  railway  lighting,  etc..     177. 
farm  products,     177. 
farm  and  dairy  products,     178. 
lighting  and  heating,     178. 
security  and  investment,     178. 
street  railway,     179. 

telegraph  and  telephone  construction  company,     179. 
common  and  preferred  stock,     180. 

CLAUSES  REGULATING  BUSINESS  CREATING  POWERS,  ETC. 

directors  to  make  by-laws,     180. 

directors  to  sell  all  the  property,     181. 

directors  to  regulate  examination  of  books,     181. 

to  apply  surplus  earnings,     181. 

to  prescribe  the  number  of  directors  for  a  quorum,     i 

directors  to  hold  and  keep  books  out  of  state,     182. 

classification  of  directors,     182. 

limitation  on  power  to  create  mortgages,     182,  183. 


INDEX.  245 

FORMS  AND  PRECEDENTS— Co/z/mnerf. 

limitation  on  right  of  stockholders  to  examine  books,     182. 
directors  and  officers  not  subject  to  removal,     183. 
directors  to  sell  property  on  request  of  majority  of  stockhold- 
ers, 183. 

executive  committee,     184. 

BY-LAWS. 

statutory  matters  to  be  provided  for  in  the  by-laws,     184. 
title,  location,  corporate  seal,     185. 
directors,     185. 

meeting  of  stockholders.     185. 
meeting  of  directors,     185. 
power  of  directors,     186. 
compensation  of  directors,     186. 
order  of  business,     186. 
officers  of  the  company,     186. 
officers,  how  chosen,     187. 
duties  of  the  president,     187. 
the  vice-president,     187. 
president  pro  tem,     187. 
secretary,     187. 
treasurer,     188. 
counsel,     188. 

duties  of  officers  may  be  delegated,     188. 
standing  committee,     188. 
transfer  of  stock,     189. 
certificates  to  be  canceled,     189. 
loss  of  certificate,     189. 
contracts  and  agreements,     189. 
checks  for  money,     190. 
books  and  accounts,     190. 
alteration  of  by-laws,     190. 
ORGANIZATION  MEETINGS,  first  meeting  of  incorporators,     190,  192. 

FIRST  MEETING  OF  DIRECTORS,      I9I,   I95. 

CERTIFICATE  OF  THE  SURRENDER  OF  CORPORATE  FRANCHISES,      I97. 
CERTIFICATE     OF     DISSOLUTION     BY     UNANIMOUS     CONSENT     OF     ALL 
STOCKHOLDERS,      I98. 

PREFERRED   STOCK,      I99. 

ASSIGNMENT   ON  BACK  OF   CERTIFICATE,      200. 

resolution  of  directors,     200. 
certificate  of  change,     200. 

STOCK  CERTIFICATES 

common  stock,     201. 

NOTICE  OF  ASSESSMENT  OF  STOCK,      201. 

NOTICE  OF  SALE  OF  STOCK  FOR  NON-PAYMENT  OF  ASSESSMENTS,      201. 
AMENDED     CERTIFICATE     OF     INCORPORATION     BEFORE     PAYMENT     OF 
CAPITAL  STOCK,      202. 


246  INDEX. 


FORMS  AND  PRECEDENTS— Continued. 

FORM  OF  ACKNOWLEDGMENT,      202. 

TRANSFER  OF  SUBSCRIPTION,      203. 

AUTHORIZATION  TO  AGENT  IN   CHARGE  OF  PRINCIPAL  OFFICE,      203. 

WAIVER  OF  NOTICE  OF  MEETING  OF  INCORPORATORS  AND  SUB- 
SCRIBERS,     204. 

PROXY,  FIRST  MEETING  OF  INCORPORATORS.      205. 

inspectors'  CERTIFICATE,      20S. 

WAIVER  OF  NOTICE  OF  THE  FIRST  MEETING  OF  THE  BOARD  OF 
DIRECTORS,      206. 

secretary's  OATH,      206. 

treasurer's  bond,    207. 

waiver  of  notice  by  stockholders  of  payment  of  assess- 
MENT,     207. 

WAIVER  OF  NOTICE  OF  ASSESSMENT,      208. 

INCREASE  OF  CAPITAL  STOCK,  CONSENT  AND  WAIVER  OF  NOTICE  OF 
MEETING,      208. 

PROXY.      stockholders'   MEETING,      20g. 

CERTIFICATE  TO  BANK,      209. 

NOTICE  OF  ANNUAL  MEETING,      210. 

RESIGNATION,      210. 

CERTIFICATE  OF  DISSOLUTION  BY  VOTE  OF  DIRECTORS  AND  CONSENT 
OF  STOCKHOLDERS   (nOT  UNANIMOUS),      210. 

consent  of  stockholders  to  dissolution,     211. 

list  of  directors  and  ofificers  at  the  time  of  dissolution,     212. 

ANNUAL   REPORT,      213. 

FRANCHISE,  sale  of.     72. 

FRANCHISE  TAX.     See  Taxation. 

FRAUD  in  taking  subscriptions  to  a  railroad  company.     50. 

in  securing  stock  subscriptions,     33. 
FREIGHT  COMPANIES,  forms  for.  163. 
FURNITURE  COMPANIES,  forms  for.     164. 
GAS,  companies  for  distributing.     103. 
GAS  COMPANY,  taxation  of.     134. 
GATES  to  be  constructed  by  railroad  companies,     98. 
GENERAL  STOCK,  same  as  "common  stock,"     129. 
GIFT  of  stock  to  corporation,     30. 
GOLD,  power  to  buy,  denied,     13. 
GOOD  WILL,  stock  may  be  issued  for.     131. 
GOVERNOR,  proclamation  of,  voiding  charter.     141. 

appeal  to,  from  tax  assessment,     144. 
GRAIN  ELEVATOR  COMPANIES,  forms  for,     165. 
GROSS  RECEIPTS,  rate  of  tax  on.     136. 

annual  report  of,     135. 


INDEX.  247 

HAY,  pressing  hay  in  bales  and  transporting  it  to  market  is  not  manu- 
facturing.    147. 

HEAT,  companies  for  distributing,     100,  102. 

HEAT  AND  POWER  COMPANY,  taxation  of,     134. 

HIGHWAYS.     See  Streets. 

HOTEL  COMPANIES,  forms  for.     159. 

ICE,  collection  and  storage  of  is  not  a  manufacture,     147. 

production  of  ice  by  artificial  means  is  a  manufacture,     147. 

ILLEGAL  DIVIDENDS.     See  Dividends,    38. 

ILLEGAL  CONTRACT,  as  to  stock,    ^2. 

IMPLIED  POWERS,  extent  of,     12. 

IMPLIED  CONTRACT,  suit  on,    6. 

INCREASE  OF  STOCK.     See  Stock. 

INCREASE  of  stock  of  railroad  companies,     85. 

INCORPORATED,  the  word  "incorporated"   to  be  used  after  corpo- 
rate name,  74. 

INCORPORATORS,  direction  of  affairs  of  company  by,     25. 

names  and  residences  must  appear  in  certificate,     17,  20. 

who  may  be,     4. 
INDEBTEDNESS.     See  Borrowing  Money;  Debt. 

renewal  of  charter  does  not  renew  debts,     20. 

limit  of,  in  certificate,     17,  20. 
INFANTS,  as  incorporators,     4. 
INSOLVENCY.     See  Lien;  Receiver. 
INSPECTORS'  CERTIFICATE,  forms  for,     205. 
INSTALMENTS  on  stock,    31,  49,  50. 

failure  to  pay,  on  stock,     27,  28. 
INSURANCE  COMPANY,  taxation  of,     135. 
INVENTORY,  receivers  and  trustees  must  file,     62. 
IRON  COMPANIES,  forms  for,     166. 

JUSTICE  OF  THE  PEACE,  acknowledgment  of  certificate  before,     24. 
LABOR,  stock  may  be  issued  for,     2. 

issue  of  stock  for,     52. 

valuation  of,  by  directors  conclusive,     129. 
LAND    AND     GENERAL     INVESTMENT    COMPANIES,     forms 

for,     158. 
LEGAL  PROCESS.     See  Process. 
LEASE,  stamp  tax  on,     229. 

stock  may  be  issued  for,    2. 

valuation  of,  by  directors  conclusive,     129. 
LEATHER  COMPANIES,  forms  for,     166. 


248  INDEX. 

LETTER  OF  ATTORNEY,  for  transfer  of  stock,     31,  32. 

LIABILITY  of  corporation  not  afifected  by  sale,  consolidation,  amend- 
ment of  articles  or  increase  or  decrease  of  stock,     70. 

secondary  liability  of  directors  and  stockholders,     62. 

of  officers  and  stockholders,     29,  61. 

of  directors  for  declaring  illegal  dividends,     2,"]. 

of  stockholders  to  creditors  for  illegal  dividend,     38. 

LIBEL,  suit  for,  by  corporation,     6. 

LICENSE  TAX  upon  increase  of  stock,     49. 

payment  of,  prerequisite  to  incorporation,     26. 

LIEN,  when  person  contracting  with  company  is  not  entitled  to  lien,     66. 
of  employes,     66. 

bookkeeper  entitled  to,  for  wages,     66. 
president  not  entitled  to,  for  wages,     66. 

of  laborers  prior  to  judgment  entered  before  insolvency,     (^. 
sale  of  property  encumbered  by,     65. 
not  to  be  impaired  by  consolidation,     68. 
of  corporation  on  stock,     29. 

LIGHTING  of  railroad  cars,     98. 

LIGHTING  AND  HEATING  COMPANIES,  forms  for,     178. 

LIJNIITATION  for  commencement  and  completion  of  railroad,     93. 

for  commencement  and  completion  of  railways,     116. 
LIMITATIONS.     See  Statute  of  Limitations. 

LIMITATION  ON  RIGHT  OF  STOCKHOLDERS  TO  EXAMINE 
BOOKS,  forms  for.     182. 

LIMIT.\TION    ON    POWER    TO    CREATE    MORTGAGES,    form 
for,     182,  183. 

LIST  of  stockholders  for  voting,     a. 

must  be  open  for  twenty  days,     Zi- 
LITERARY  CORPORATIONS  need  not  have  stock,     17. 
LOAN  ASSOCIATIONS.     See  Building  and  Loan  Associations. 

statement  as  to  membership,     48. 
LOST  CERTIFICATES,  new  certificates  may  be  issued  for.     74,  189. 

proceedings  where  company  refuses  to  issue  new  certificates,     75. 
LOW  LANDS,  corporations  organized  for  reclamation  of,     76. 
MALICIOUS  PROSECUTION,  corporation  may  be  sued  for,    6. 
MANAGERS.     See  Directors. 

synonymous  with  directors,     120. 
MANDAMUS  to  secure  right  to  examine  books,     36. 
MANUFACTURING  COMPANIES,  forms  for,     159- 

exemption  of,  from  ta.xation,     146. 

definition  of,     146. 

power  to  make  negotiable  paper,     13,  14. 


INDEX.  249 

MANUFACTURING     BUSINESS,    corporations     for.    under    act    of 
1883.     10. 

MASTER  AND  SERVANT.     See  Employes. 

MEETINGS.     See  Voting. 

of  stockholders  to  be  held  in  Delaware,     128. 

to  amend  certificate  after  organization,     127. 

for  the  purpose  of  consolidating  with  another  corporation.     67. 

to  increase  stock,     48. 

how  first  meeting  shall  be  called,     46. 

of  stockholders  to  dissolve.     54. 

for  reduction  of  capital  stock,     53. 

of  directors,     40. 

of  stockholders.     33. 

for  electing  directors,     49. 

MEETING  OF  STOCKHOLDERS,  forms  of  by-laws  for,     185. 
MEETING  OF  INCORPORATORS,  forms  for,      190,  192. 
MEETING  OF  DIRECTORS,  forms  for,     191,  195. 

forms  of  by-laws  for.     185. 
MERCANTILE  AGENCY,  forms  for,     167. 
MERGER.     See  Consolidation. 

of  railroad  company,     97. 

of  railway  corporations,     119. 

stock  given  to  corporation  does  not  merge,     30. 
MINING  COMPANIES,  forms  for.     160. 
MINUTES,  as  evidence,     34. 

MISDEMEANOR,  acting  under  void  charter  a,     141. 
MISTAKE,  proclamation  of  governor  correcting,     143. 
MISUSER,  no  provision  for  forfeiture  in  case  of,     73. 
MONEY,  power  to  issue,  denied,     13. 
MORTGAGE,  foreclosure  of.     72. 

may  be  created  by  consolidated  corporation,     70. 

director  may  hold  mortgage  against  company,     40. 

right  to  mortgage  property  out  of  state,     15. 

of  corporate  property,     5. 

stamp  tax  on,  229. 

MUNICIPALITIES,    consent    to    use    of    streets    for    pipes    and    poles, 
100,  102,  105. 

consent  to  use  of  streets  for  water  and  gas  pipes,     103. 

not  to  lend  credit  to  corporations,     i. 

not  to  become  shareholders  in  corporation,     i. 
NAME  of  company,     16,  17. 

to  be  displayed  on  principal  ofifice.     74. 

change  of,     126. 

fee  on  filing  certificate  of  change  of.     121. 


250  INDEX. 

NAME — Continued. 

confusion  of,     17. 
misnomer  of  corporation,     18. 
assumption  of,  by  usage,     18. 
protection  of,     18. 
fraud  in  use  of,     18. 

NEGLIGENCE  in  issue  of  stock.     32. 
of  agents  of  corporation,     45. 

NEGOTIABLE  PAPER,  implied  power  to  make,     12. 

power  of  manufacturing  company  to  make,     13,  14. 

NEWSPAPER,  printing  and  publishing  newspaper  is  not  manufactur- 
ing,    147- 
NEWSPAPER  COMPANIES,  forms  for,     169. 

NEWSPAPER  AND  PUBLISHING  COMPANIES,  forms  for.     170. 
NON-RESIDENTS,  as  incorporators.     20. 
NON-USER,  no  provision  for  forfeiture  in  case  of,     73. 
NOTARY  PUBLIC,  acknowledgment  of  certificate  before,     24. 

NOTES,  implied  power  to  make,     12. 

power  to  discount  denied,     13. 
NOTICE  of  change  of  annual  meeting,     49. 

of  first  meeting,     46. 

of  meeting  to  amend  certificate  after  organization,     127. 

of  sale  of  stock,     27. 

of  time  for  filing  claims  against  corporation  after  dissolution.     63. 

person   dealing  with   corporation   is   chargeable   with   notice   of  its 
powers,     46. 

to  trustees  and  receivers  of  continuance  of  action,     59. 

of  certificate  of  dissolution,     54. 

of  stockholders'  meeting  to  dissolve,     54. 

of  meeting  to  reduce  capital  stock,     53. 

of  sale  of  stock  of  delinquent  subscriber,     51. 

as  to  time  and  place  of  payment  of  assessment  on  stock,     49. 

of  meeting  to  increase  stock,     48. 

of  change  of  by-laws,    47. 

of  meeting  for  the  purpose  of  consolidating  with  another  corpora- 
tion,    67. 

of  resolution  as  to  use  of  streets  for  pipes,     loi,  104. 

of  application  to  set  aside  election  of  officers.     34. 

on  face  of  certificate  of  stock  as  to  conditions  in  articles  of  asso- 
ciation,    32. 
NOTICE  OF  ASSESSMENT  OF  STOCK,  forms  for,    201. 
NUMBER  of  incorporators,     3. 

NUMBER    OF    DIRECTORS    FOR    A    QUORUM,    forms    to    pre- 
scribe,    181. 


INDEX.  251 

OATH  may  be  required  from  officers  and  agents,     45. 

OFFICE,  meeting  of  stockholders  to  be  held  at  principal  ofifice,     128. 

name  to  be  displayed  on  principal  office.     74. 

location  of,     15,  16. 

principal  ofifice  must  be  in  Delaware,     35. 

books  to  be  kept  in  principal  office  in  Delaware,     35. 

forfeiture  of  charter  for  failure  to  maintain,     35. 

failure  to  maintain,  makes  members  liable  as  partners,     36. 

change  of  location  of,     126. 

must  be  set  forth  in  certificate,     16,  18. 
OFFICERS  to  be  president,  secretary  and  treasurer,     43. 

election  of,     43. 

president  to  be  chosen  from  among  directors.     43. 

secretary  to  be  sworn  and  to  keep  records  and  minutes,     43. 

treasurer  to  give  bond,    43. 

secretary  and  treasurer  may  be  the  same  person,     43. 

powers  of  ofificers,     43,  44. 

signature  of  contracts  by,     44. 

de  facto,    44. 

penalty  for  neglect  to  prepare  stock  list,     3^. 

liability  for  false  statement  of  the  affairs  of  the  company,     38. 

powers  of,  after  dissolution,  55. 

liability  of,  how  enforced,     61. 

powers  of,  discussed,     44. 

vacancy  in  ofifices,    45. 

failure  to  elect  does  not  dissolve  corporation,     9,  45. 

penalty  for  dereliction  of,     53. 

remedy  against  corporation  for  debts  paid,    61. 

penalty  for  making  false  statement  to  secretary  of  state,     136. 

forms  relating  to,     187. 

forms  of  by-laws  for,     186. 

remedies  against,  not  to  be  impaired  by  amendments  of  charter,     14. 

must  appear  in  certificate,     17,  20. 
OIL  COMPANY,  taxation  of,     135. 
ORDER  OF  BUSINESS,  forms  of  by-laws  for,     186. 
PAPER  COMPANIES,  forms  for,     172. 
PARTIES  in  suits  by  or  against  corporations,    6. 
PATENT  COMPANIES,  forms  for,     161. 

PATENTS,  exemptions  of,  from  taxation.     146. 

to  be  assigned  to  receiver  appointed  to  collect  taxes,     142. 
PENAL  CORPORATIONS,  may  be  chartered  by  special  act,     2. 
PENALTY  for  dereliction  of  officers,     53. 

in  by-laws,     5. 

for  failure  to  display  name,     74. 

for  acting  under  void  charter,     141. 


252  INDEX. 

PENALTY— Continued. 

for  injuring  railroad  property,     95. 

for  making  false  statement  to  secretary  of  state.     136. 
PERPETUAL  EXISTENCE,  must  be  set  forth  on  certificate,     17.  20. 
PERSONAL  PROPERTY,  stock  declared  to  be,     31. 
PERSONS  who  may  be  incorporators.     4. 
PIPE  LINE  COMPANY,  taxation  of,     135. 
PIPES,  laying  pipes  in  streets,     100,  loi,  102. 
PLEDGE,  who  may  vote  pledged  stock.     46. 
PLEDGE  OF  STOCK,  stamp  tax  on.     229,  230. 
POLES,  use  of.  in  streets,     102. 
POLICE  POWERS,  definition  of,     15. 
POOL,  legality  of  voting  pool,     22. 
POTTERY  COMPANIES,  forms  for,     173. 
POWER  OF  ATTORNEY,  stamp  tax  on,     229,  230. 
POWER  OF  DIRECTORS,  forms  of  by-laws  for,     186. 
POWER  AND  HEAT  COMPANY,  taxation  of,     134. 
POWERS  of  corporations.     4. 

general  discussion  of.     11. 

enumeration  of  powers  in  early  acts.     10. 

what  powers  are  denied.     13. 

extent  of  implied  powers.     12. 

to  hold  stocks  and  securities  of  other  corporations,     125. 

companies  for  distributing,     100,  102. 

of  trustees  upon  dissolution.     56. 

of  railroad  companies.     82. 

corporation  cannot  take  lien  on  its  stock,     29. 

may  purchase  its  own  stock,     30. 

created  and  defined  by  certificate,     21. 

to  what  extent  powers  may  be  assumed  in  the  certificate,     21. 

as  to  succession,     4.  5. 

to  sue  and  be  sued,     4.  5. 

to  have  common  seal,     4,  6. 

may  acquire  property.     4,  8. 

may  appoint  agents.     5.  8. 

may  make  by-laws,     5,  9. 

may  dissolve,     5,  9. 

general  powers,     10. 

of  railway  corporations.     107. 
PREFERRED  STOCK,  creation  of.     19.  127. 

form  for,     199. 

not  to  exceed  two-thirds  of  the  actual  capital.     129. 

may  be  redeemed.     129. 

dividends  on,     129. 


i 

i 


INDEX.  253 

PREFERRED  STOCK— Continued. 
voting  on,     19. 
dividends  on,     19. 

PRE-EXISTING  CORPORATIONS,  amendments  of,     133. 
exempt  from  tax  under  act  of  March  10,  1899,     145. 

PRESIDENT,  shall  be  chosen  from  among  the  directors,     44. 
service  of  process  upon,     60. 
vacancy  in  office  of,     45. 

failure  to  elect,  does  not  dissolve  corporation.     45. 
contract  made  by,     7. 
not  entitled  to  lien  for  services,     66. 

PRESIDENT  PRO  TEM,  forms  of  by-laws  for,     187. 

PRINCIPAL  OFFICE.     See  Office,     18. 

PRINCIPAL  AND  SURETY.     See  Bonds. 

PRINTER  OF  CALICO  is  not  a  manufacturer.     147. 

PRINTING  AND  PUBLISHING  COMPANIES,  forms  for,     160. 

PROCESS.         See  Foreign  Corporations. 

method  of  serving  of  process  upon  corporation,     60. 

PROCLAMATION  of  governor  voiding  charter,     141. 

PROMISSORY  NOTES,  implied  power  to  make,     12. 

power  to  discount,  denied,     13. 
PROPERTY,  valuation  of,  by  directors  conclusive,     129. 

issue  of  stock  for,     52. 

right  to  hold,     4,  8. 

reference  to,  in  certificate,    8. 

transfer  of  all  property  does  not  work  dissolution,     10. 

right  to  hold  property  out  of  the  state,     15. 

value  of,  must  appear  in  certificate,     17,  20. 

effect  of  dissolution  on,     20. 
PROXY  at  election  for  directors,     40. 

directors  cannot  vote  at  board  meetings  by,     40. 

a  proxy  need  not  be  a  stockholder,     35. 

FIRST  MEETING  OF  INCORPORATORS,  form  for,    205. 

PUBLIC  POLICY,  when  voting  trust  conflicts  with,     23. 

PUBLIC  WORKS  COMPANIES,  forms  for,     161. 

QUORUM,  power  to  fix,     22. 

a  majority  of  the  directors  of  a  corporation  is  a  quorum,     40. 

RAILROADS,  definition  of,     120. 
articles  of  association,     81. 

approval  of  court  to  articles  of  association,     82. 
powers  of  railroad  companies,     83. 
required  capital  stock,     83. 
company's  charter  as  evidence,    84. 


254  INDEX. 

R  AI LRO  A  D  S— Continued. 

subscription  to  stock,    84. 

ten  per  cent,  must  be  paid  in,     84. 

directors,     85. 

organization,     85. 

increase  of  capital  stock,     85. 

assessment  of  damages,  condemnation  proceedings,    86. 

width,  surveys,  etc.,     88. 

bridges,  passages,  etc.,    90. 

crossings,  switches,  signals,  etc.,     92. 

limitation  for  commencement  and  completion.     93. 

power  to  borrow  money,     93. 

fences,  cattle  guards,  etc..    94. 

badge  of  conductor,     95. 

damaging  property  of  road.     95. 

annual  report  of  stockholders.     96. 

merger  of  companies,     97. 

signal  boards,    97. 

gates,  flagmen,  etc..     98. 

lighting  of  cars.     98. 

air  brake,     98. 

discrimination  of  charges,     99. 

fees  to  state.     100. 

abridging  franchises  of.  violation  of  charter,     14. 

may  construct  lines  of  telegraph  and  telephone  for  use  of  road, 

formation  of  railroad  corporations,     81. 

RAILWAYS,  articles  of  association,     106. 

approval  of  court  to  articles  of  association,     107. 

powers  of  railway  corporations,     107. 

stock  required  to  be  paid,     108. 

subscription  to  stock,     109. 

ten  per  cent,  must  be  paid  in,     109. 

directors,     109. 

organization,     no. 

increase  of  capital  stock,     no. 

stock,  personal  estate,     no. 

transfer  of  stock,     no. 

assessment  of  damages,     no. 

width,  surveys,  etc.,     in. 

bridges  and  passages,     113. 

crossings,  etc.,     n5. 

grade  crossings  to  be  avoided,     115. 

limitation  for  commencement  and  completion.     116. 

borrowing  money,     117. 

injury  to  property  of  road,     117. 

signal  boards,     118. 

annual  report  to  stockholders,     118. 


INDEX.  255 

RAI  L\W  AY  S—Coutimted. 

merger,     119. 

fees  to  state,     120. 

not  to  use  street  where  other  track  is  laid,     120. 

definition  of,     120. 

may  construct  lines  of  telegraph  and  telephone  for  use  of  road,     120. 

companies  for  roads  operated  by  other  power  than  steam,     106. 
RAILWAY  CAR  COMPANIES,  forms  for,     173. 
RATES,  discrimination  in  railroad  charges,     99. 
REAL  ESTATE,  right  to  hold,  out  of  state,     15. 

power  to  hold,    8. 

stock  may  be  issued  for,     2. 
RECEIVERS,  appointment  of,  after  dissolution,     56. 

general  powers  of,  discussed,     57. 

must  file  inventory,     62. 

compensation  of,     67. 

to  collect  taxes,     142. 

to  be  made  party  to  suits,     65. 

death  of,  does  not  abate  action,     65. 

sale  of  perishable  property,    65. 

proof  of  claims  against  corporation  in  the  hands  of,     63. 

adjustment  of  claims  by,     63. 

powers  of,  after  dissolution,     56. 

RECORD,  of  certificate,     24. 

RECORDER  OF  DEEDS,  certificate  to  be  recorded  in  office  of,     24. 

REDUCTION  of  capital  stock,     53. 

REFINING  CRUDE  PETROLEUM  is  manufacturing.  148. 

RELIGIOUS  CORPORATIONS,  not  to  pay  state  fees,     121. 
need  not  have  stock,     17. 

RELIGIOUS  SOCIETIES,  rights  preserved,     2. 
RENEWAL,  state  tax  on,     123. 

effect  of,     125. 

of  corporate  existence,     123. 

of  charter,  does  not  renew  debts,     20. 

of  charter  in  existence  at  time  of  adoption  of  constitution,     2. 

RE-ORGANIZATION.     See  Franchise.    71. 

REPEAL  of  inconsistent  laws,     134. 

REPORT,  annual  report  of  corporation,     135. 

to  stockholders  of  railroad  companies,    96. 
failure  of  directors  to  file,     53. 

RESIDENCE,  of  corporation  for  purpose  of  taxation,     148. 

RESOLUTION  OF  DIRECTORS,  forms  for,     200. 

RESTORATION  of  charter  forfeited  for  non-payment  of  taxes,     143. 


256  INDEX. 

RETALIATORY  TAXATION,  provisions  for.     140. 
REVIEW  of  tax  assessment,     144. 
REVOCATION  of  charters.     2. 
SALE  of  stock,     48. 

of  stock  of  delinquent  subscriber.     51. 

of  franchise,     71,  72. 

of  stock  for  failure  to  pay  instalments. 

of  perishable  or  deteriorating  property  by  receiver,     65. 
SEAL,  use  of,  by  corporation,     7. 

not  necessary  to  use  wax  or  wafer,     7. 

appointment  of  agent  need  not  be  under.     8. 

right  to  use,     4,  6. 

sealing  of  certificate,     24. 
SECRETARY,  forms  of  by-laws  for,     187. 

vacancy  in  office  of,     45. 

service  of  process  upon,     60. 

duties  of,    43. 

secretary  and  treasurer  may  be  the  same  person.    43. 

when  secretary  is  not  a  competent  witness.     43. 

failure  to  elect,  does  not  dissolve  corporation.     45. 

improper  use  by  secretary  of  his  knowledge   of  the  affairs  of  the 
company,     48. 
SECRETARY'S  OATH,  forms  for.     206. 
SECRETARY  OF  STATE,  certificate  to  state  treasurer,     139. 

fees  of,     121. 

fee  to,  on  filing  amendment  of  certificate  before  payment  of  capital 
stock,     126. 

filing  decree  of  judgment  of  dissolution  in  office  of,     59. 

certificate  of  consolidation  to  be  filed  in  office  of.     68. 

filing  articles  of  re-organized  company  in  office  of,     71. 

compensation  of,  for  services  in  collecting  taxes,     145. 

certificate  to  be  filed  with,     24. 
SECURITIES  AND  INVESTMENT  COMPANIES,  forms  for,     162, 

178. 
SERVICE.     See  Process. 
SHAREHOLDERS.     See  Stock;  Stockholders;  Voting. 

municipalities  not  to  become  shareholders  in  corporations,     I. 
SHIPPING  COMPANIES,  forms  for.     170. 
SHIP-BUILDING  COMPANIES.     172. 
SIGNAL  BOARDS,  construction  of.  by  railroad  companies,     97. 

to  be  constructed  by  railway  corporations,     1 18. 
SIGNALS,  construction  of,  by  railroad  companies.     92. 
SILVER,  power  to  buy,  denied,     13. 
SITUS  of  capital  stock,     122. 


I 


INDEX.  257 

SLAUGHTERING  CATTLE  is  not  manufacturing,     147- 
SLEEPING  CAR  COMPANY,  taxation  of,     135. 
SPECIAL  ACT,  corporation  not  to  be  created  by,     i. 
SMELTING  AND  REFINING  COMPANIES,  forms  for,  169. 
SUBSCRIPTION.     See  Stock;  Stock  Subscription. 
SUCCESSION,  right  to  have,    4,  5. 
when  may  be  perpetual,    4. 

SUGAR  COMPANIES,  forms  for,     167. 

SUITS.     See  Actions. 

right  to  sue  and  be  sued,    4,  6. 

SUITS  on  stock  subscription,     31. 

SUMMONS.     See  Process,    60. 

SURETYSHIP.     See  Bonds. 

SURPLUS  EARNINGS,  forms  to  apply,     181. 

SURRENDER  of  charter  before  beginning  of  business,     58. 
of  franchises,     10. 

SWITCHES,  construction  of,  by  railroad  companies,    92. 

SURVEYS  by  railroad  companies,     88. 

STAMPS,  United  States  stamp  taxes,     225. 

STANDING  COMMITTEE,  forms  of  by-laws  for,     188. 

STATIONERY  COMPANIES,  forms  for,     168. 

STATUTE  OF  LIMITATIONS.     See  Limitations. 
as  a  bar,     50. 

when  statute  begins  to  run  against  stock  subscription,     50. 
in  suits  upon  bonds  of  officers,    43,  44. 

STATUTES,  rule  as  to  construction  of,    4. 

manner  of  passing  certain  appropriation  bills,     i. 
STATUTORY  MATTERS,  to  be  provided  for  in  by-laws,     184. 
STEAM,  HEAT  AND  POWER  COMPANIES,  organization  of,     100. 
STREETS,  laying  pipes  in,     100,  loi,  102. 
STREET  RAILWAY  COMPANIES.     See  Railways. 

forms  for,     178. 
STOCK.     See  Preferred  Stock. 

kinds  of,     129. 

situs  of  capital  stock,     122. 

voting  of,    33. 

list  of  stockholders,    33. 

declared  to  be  personal  property,     31. 

to  be  issued  only  for  cash,  labor  or  property,     2,  52,  129-133. 

subscriptions  must  be  paid  to  corporation,     31. 

when  subscriptions  payable,     31. 
17 


258  INDEX. 

STOCK — Continued. 

payment  on  account  of,     27. 

subscriptions  to,     27. 

failure  to  pay  instalments,     27. 

forfeiture  of,     27,  28. 

illegal  restraint  on  alienation,     J2. 

negligence  in  transfer  of,     32. 

fraud  in  securing  stock  subscriptions.     S3- 

stock  books  must  be  kept  in  principal  office  in  Delaware,     35. 

increase  of,     48,  49. 

voting  of,     2. 

voting  of,  by  trustee,    46. 

trustee  may  vote,     46. 

belonging  to  corporation,  not  to  be  voted.     46. 

who  may  vote  pledged  stock.     46. 

reduction  of,     37,  S3- 

limitation  as  to  extent  to  which  stock  may  be  reduced,     53. 

not  to  be  reduced  until  debts  are  paid,     53. 

certificate  of  payment  of  stock,     52. 

sale  of  stock  of  delinquent  subscriber,     51. 

statement  in  lieu  of  certificate  of  stock,     48. 

sale  of,     48. 

purchase  of,  by  secretary,     48. 

assessment  of,    49. 

may  be  issued  by  consolidated  corporation,     70. 

payment  for  stock  of  dissatisfied  stockholders  on  consolidation,     69. 

of  railway  corporations,     108. 

issuing  new  certificates  of  stock  for  those  lost  or  destroyed,     74. 

power  to  hold  stock  of  other  corporations.     125. 

lien  of  corporation  on,     29. 

corporation  may  purchase  its  own  stock.     30. 

when  stock  may  be  re-issued.     30. 

transfers  of,     31,  32. 

limitation  as  to  amount.     16,  18. 

dififerent  classes  of,     16,  19. 

amount  of,  must  be  stated  on  certificate.     16,  18. 

stamp  tax  on,     226,  227. 

state  may  tax  stock  held  by  non-residents,     122. 

fee  on  filing  certificate  of  increase  or  decrease  of,     121. 

increase  of.  of  railway  corporations,     no. 

required  capital  stock  of  railroad  companies.     83. 

creation  of  preferred  stock,     126. 

change  of  the  par  value,     126. 

increase  of  stock  of  railroad  companies.     85. 

subscription  to  stock  of  railroad  companies.     84. 

execution  against,     122. 

tax  on,     145. 


INDEX.  259 

STOCKHOLDERS.     See  Stock;  Stock  Subscription. 

liability  of,     29. 

when  original  owner  remains  liable  notwithstanding  assign- 
ment,    29. 

suits  against  on  subscriptions,     31,  32. 

failure  to  maintain  office  may  make  stockholders  liable  as  part- 
ners,    36. 

relation  of,  established  subscription  and  payment,     32. 

voting  by,     33. 

meetings  of,     33. 

right  to  inspect  stock  list  and  books,     33. 

limitation  upon  right  to  examine  books,     36,  37. 

liability  to  creditors  for  illegal  dividend.  38. 

liability  of,  how  enforced,     61. 

when  liability  ceases  upon  transfer,     50. 

remedy  against  corporation  for  debts  paid,     61. 

secondary  liability  of,     62. 

personal  liability  of,     17,  21. 

restrictions  on,  as  to  right  to  examine  books,     22. 

STOCK  BOOK,  either  original  or  duplicate  book  may  be  kept  in  prin- 
cipal office,     36. 

STOCK  CERTIFICATES,  forms  for,     201. 

STOCK  LEDGER  as  evidence  of  stock  ownership,     33. 

STOCK  SUBSCRIPTION.     See  Stock. 

corporation  cannot  make,     125. 

when  avoided  by  fraudulent  statements,     50. 

when  no  action  will  lie  on,     51. 

when  subscriber  is  not  discharged  by  reason  of  change  in  char- 
ter,    51. 

when  by-law  is  part  of,    9. 
TAX.     See  License  Tax. 
TAXATION.     See  Fees  and  Taxes. 

corporation  taxation,     134. 

annual  report  of  corporations,     135. 

penalty  for  false  statement,  or  for  neglect  to  make  statement,     136. 

rate  of  tax,     136. 

certificate  of  secretary  of  state  to  treasurer,     139. 

tax  to  be  a  debt,     139. 

remedies  for  collection  of  tax,     139. 

foreign  fire  insurance  companies  exempt,     139. 

retaliatory  taxation,     140. 

charter  void  by  failure  to  pay  taxes,     141. 

report  of  state  treasurer,  governor's  proclamation  voiding  char- 
ter,    141. 

proclamation  to  be  filed  and  published,     141. 

penalty  for  acting  under  void  charter,     141. 


26o 


INDEX. 


TAXATION— Continued. 

other  remedies  for  collection  of  taxes,     142. 

proclamation  of  governor  correcting  mistake,     143. 

restoration  of  charter,     143. 

review  of  assessment,     144. 

compensation  of  secretary  of  state,     145. 

pre-existing  corporations  exempt  from  tax,     145. 

franchise  tax,     145. 

forfeiture  for  non-payment  of  taxes,     149. 

foreign  corporations  doing  business  in  this  state,     150. 

state  tax  on  renewal  of  corporate  existence,     124. 

contract  as  to  taxation,     14. 

residence  of  corporation  for  purposes  of  taxation,     148. 

state  may  tax  stock  held  by  non-residents,     122. 

exemption  from,     145. 

of  poles,     102. 

TAXES,  failure  to  pay,     10. 
TAX  EXEMPTION  in  state  constitution,     145. 
TELEGRAPH,  railroads  and  railways  may  construct,     120. 
powers  of  telegraph  companies,     105. 

TELEGRAPH  COMPANY,  taxation  of,     134. 

TELEGRAPH     AND     TELEPHONE     CONSTRUCTION     COM- 
PANIES, forms  for,     179. 

TELEPHONE  may  be  constructed  by  railroads  and  railways.     120. 

TELEPHONE  COMPANY,  taxation  of,     134. 
powers  of  telephone  companies,     105. 

THEATRICAL  COMPANIES,  forms  for.     167. 

THREAD  COMPANIES,  forms  for,     166. 

TITLE  of  stock,     32,  3;^. 

TITLE.  LOCATION,  CORPORATE  SEAL,  forms  of  by-laws  for,    185. 

TOBACCO  COMPANIES,  forms  for,     165. 

TOWNS.     See  Municipalities. 

TRANSFERS  of  stock,    31,  32. 

when  liability  of  stockholders  ceases  upon  transfer,     50. 
TRANSFER  OF  STOCK,  forms  of  by-laws  for,     189. 
TRANSFER  OF  SUBSCRIPTION,  forms  for,     203. 
TREASURER,  forms  of  by-laws  for,     188. 

when  treasurer  may  sell  stock  of  delinquent  subscriber,     51. 

payment  of  assessment  on  stock  to,     49. 

vacancy  in  office  of,     45. 

failure  to  elect  does  not  dissolve  corporation,     45. 

may  be  required  to  give  bond,     43. 

secretary  and  treasurer  may  be  the  same  person.     43. 


INDEX.  261 

TREASURER'S  BOND,  forms  for,     207. 

TROVER  will  lie  for  a  corporate  certificate  of  stock,     76. 

TRUST,  legalit}'  of  voting  trust,     22. 

TRUSTEES,  directors  are  trustees  for  company,     42. 

must  file  inventory,     62. 

adjustment  of  claims  by,     63. 

appointment  of.  after  dissolution,     56. 

powers  of,  upon  dissolution,     56. 

may  vote  stock,     46. 
TYPESETTING  MACHINE  COMPANIES,  forms  for,     164. 
TYPEWRITING  MACHINE  COMPANIES,  forms  for,     163. 
VICE-PRESIDENT,  forms  of  by-laws  for,     187. 
VOID  CHARTER,  penalty  for  acting  under,     141. 
VOTING,  stock  held  by  the  company  cannot  be  voted  upon,     35. 

stock  held  by  director  or  trustee  may  be  voted,     35. 

hypothecated  stock  may  be  voted,     35. 

on  preferred  stock,     19. 

of  stock,     2. 

cumulative,     22,  24. 

limitations  as  to  right,     22. 

for  directors  to  be  by  ballot,     49. 

of  stock,     33. 

by  proxy,     35. 

who  may  vote  pledged  stock,     46. 

company  may  vote  stock  of  other  corporations,     125. 

stockholder  may  vote  for  any  number  he  chooses.     35. 

when  votes  may  be  rejected,     35. 
VOTING  POOL,  legality  of.     22. 
VOTING  TRUST,  legality  of,     22. 
WAGES,  lien  for,    66. 
WAIVER  of  notice  of  meeting,     47. 
WAIVER    OF    NOTICE   OF    MEETING   OF    INCORPORATORS 

AND  SUBSCRIBERS,  forms  for,     204. 
WAIVER    OF    NOTICE    OF   THE    FIRST    MEETING    OF    THE 

BOARD  OF  DIRECTORS,  forms  for,     206. 
WAIVER  OF  NOTICE  BY  STOCKHOLDER  OF  PAYMENT  OF 

ASSESSMENT,  forms  for.    207. 
WATER,  companies  for  distributing,     103. 
WATER  POWER  COMPANIES,  forms  for,     162. 
WIRES,  use  of,  in  streets,     102,  103. 
WORDS  DEFINED,  "directors,"     120. 

"managers,"     120. 

"railroads,"     120. 

"railways,"     120. 


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